January 21 2014
Predict, forecast, divine, foresee… Each year, pundits, analysts, and authorities from around the world offer investors insight to what the year may hold. While prognosticating brings to mind the words of British Prime Minister Winston Churchill who said, “It is always wise to look ahead, but difficult to look further than you can see.” With that firmly in mind, let’s take a look at what some experts have been saying about 2014.
Last week, economists at the World Bank released their latest growth forecast which projects global economies will expand by 3.2 percent this year. That’s an improvement over last year’s growth rate of 2.4 percent. Developing nations are expected to grow faster than high income countries. The Global Economic Prospects report cautioned, “Growth prospects for 2014 are, however, sensitive to the tapering of monetary stimulus in the United States, which began earlier this month, and to the structural shifts taking place in China’s economy.”
The 10 active money managers sitting at Barron’s Roundtable found little to agree about as they discussed interest rates, stock prices, gross domestic product (GDP), and what to have for lunch. According toBarron’s:
“The Roundtable’s optimists expect the global economy to pick up, bonds to tick up, and stocks to mosey higher, notwithstanding the errant hiccup. The pessimists… see crippled economies here and abroad, rotten government policies, and a selloff in stocks that could rekindle fears of, yes, systemic risk. Yet, somewhere between these poles, all say, lie plenty of investments worth a wager…”
And, what does the new chairwoman of the U.S. Federal Reserve expect? After all, according to The Wall Street Journal which reviewed more than 700 predictions made by Federal Reserve officials about growth, jobs, and inflation, Janet Yellen made the most accurate forecasts from 2009 through 2012. In an interview published in Time Magazine this week, Yellen said the Fed’s policymaking committee generally is hopeful that U.S. economic growth could be upwards of 3 percent during 2014. Additionally, she anticipates inflation will move toward 2 percent and the housing market will pick up and continue to recover.
Ms. Yellen offered no prediction about another subject of great concern to many Americans – the outcome of Super Bowl XLVIII.
- Data as of 1/17/141- WeekY-T-D1-Year3-Year5-Year10-Year
- Standard & Poor’s 500 (Domestic Stocks)-0.002-0.00524.2%0.12418.0%4.9%
- 10-year Treasury Note (Yield Only)2.8N/A184.108.40.206.1
- Gold (per ounce) 0.54.0-25.4-2.88.511.9
- DJ-UBS Commodity Index1.2-0.5-11.1-8.32.5-1.3
- DJ Equity All REIT TR Index0.4 2.7 1.910.319.98.9