The market, as it turned out, was even more bullish than that (the S&P is currently past 1,800). Looking toward 2014, Subramanian once again has a very bullish call - 2000.
"We believe the Standard and Poor's 500 Index will rise to 2000 by the end of 2014, which implies a price return of about 11%," Subramanian said. "While that gain would be less than in 2014, our view is still higher than the consensus view on Wall Street."
Her target assumes $118 in EPS.
At the bank's 2014 global forecast press conference, Subramaniam tried to debunk the bear case. "Everyone is bullish-it's time to sell" is misguided.
"Take note that allocations to equities (53%) are lower than the benchmark (65%)," she said. "As for the Federal Reserve, we believe tapering, accompanied by a growing economy, would actually benefit cyclical stocks."
Subramanian's macro strategist colleagues basically echoed the sentiment that the taper is already priced in to the market.
Subramanian recommended buying technology, industrial, and energy stocks, while avoiding more "bond-like" stocks in telecom and utilities. She also said investors would be wise to avoid the consumer discretionary sector, which "could be hurt by rising rates."
"Markets have settled into what has generally been a sweet spot for equities: low but rising rates, low inflation and a pickup in economic growth," she said. "We believe we are on the road to normalcy and that U.S. equity markets should continue to climb higher."
Here's a look at the equity risk premium, which remains above average suggesting better returns in stocks relative to bonds.
BAML