Here are some of the latest forecasts from one of the most feared, I mean, most respected investment houses on Wall Street:
1. The lousy winter weather has probably taken a half percentage point off GDP growth in the first quarter, with the inventory correction taking off another half point. Still, they expect a healthy 3% growth rate beginning in the second quarter. Next year, they expect a full-year GDP growth rate of 3.2%
2. They expect interest rates to remain basically unchanged through 2015. (No mention is made of Janet Yellen's comments yesterday.)
3. They don't expect the price-earnings ratio to increase but do expect earnings-per-share to increase from $108 last year to $116 this year and $125 next year. This should drive the S&P 500 from 1,872 now to 1,900 at year-end and 2,100 at year-end 2015.
4. Gold will drop from $1,342 per ounce today to $1,050 by year-end but rise to $1,200 by year-end 2015.
5. The recent first-ever bond default in China is no big deal.
6. The dollar will rise somewhat this year against the Euro and weaken somewhat next year.
7. The dollar will continue to rise against the Yen, getting 115 Yen/$ by year-end next year.
They also repeated their earlier observation that there is a 57% probability of 10% correction in the stock market in any given year, but that probability increases to 63% in years when the market is already up, like right now.
Think about it - there is a 63% probability of a 10% drop this year - get happy with it - it is good for us!
1. The lousy winter weather has probably taken a half percentage point off GDP growth in the first quarter, with the inventory correction taking off another half point. Still, they expect a healthy 3% growth rate beginning in the second quarter. Next year, they expect a full-year GDP growth rate of 3.2%
2. They expect interest rates to remain basically unchanged through 2015. (No mention is made of Janet Yellen's comments yesterday.)
3. They don't expect the price-earnings ratio to increase but do expect earnings-per-share to increase from $108 last year to $116 this year and $125 next year. This should drive the S&P 500 from 1,872 now to 1,900 at year-end and 2,100 at year-end 2015.
4. Gold will drop from $1,342 per ounce today to $1,050 by year-end but rise to $1,200 by year-end 2015.
5. The recent first-ever bond default in China is no big deal.
6. The dollar will rise somewhat this year against the Euro and weaken somewhat next year.
7. The dollar will continue to rise against the Yen, getting 115 Yen/$ by year-end next year.
They also repeated their earlier observation that there is a 57% probability of 10% correction in the stock market in any given year, but that probability increases to 63% in years when the market is already up, like right now.
Think about it - there is a 63% probability of a 10% drop this year - get happy with it - it is good for us!
