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Stocks have enjoyed a nice run so far in 2007 and market strategists are predicting further gains in the second half of the year, but Wall Street experts say investors should expect further market volatility.
There are a number of potential risks which could affect the market in the back half of the year and include another spike in energy prices, housing worries, the potential for geopolitical blowups and, of course, what the Federal Reserve decides to do about interest rates.
Stocks got off to a strong start on the first trading day of the third quarter, with the major indices postings gains of about 1%.
The market should end the year above current levels, say market pros such as Goldman Sachs chief U.S. portfolio strategist Abby Joseph Cohen, who is forecasting the S&P 500 to end the year at 1600, translating to broad market gains of about 6%.
"It's based upon the idea that profits are good and that 2008 will be another year of economic and profit growth," Cohen told CNBC.
"Without a doubt in my mind, the bloom is not off the rose and the market works higher," says Vince Farrell, managing director at Scotsman Capital Management. "Valuations are reasonable, interest rates although up a little bit are perfectly moderate in the longer scheme of things."
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