Byron R. Wien, vice chairman of Blackstone Advisory Partners, has disclosed his top 10 surprises for 2014.
The latest forecast list by the former U.S. chief investment strategist for Morgan Stanley marks the 29th year of annual predictions. He also included his usual list of four “also-rans,” predictions that aren’t as important or have a degree of probability below 50 percent.
1. The stock market is a Dickensian market, “the best of times and the worst of times,” which sees a sharp correction of more than 10 percent early on followed by a move to new highs.
2. The U.S. economy will grow more than 3 percent.
3. The dollar strengthens, trading below $1.25 against the euro and buying 120 yen.
4. Japan’s Shinzo Abe’s aggressive fiscal and monetary expansion results in the Nikkei 225 rising to 18,000 early in the year, but other forces take their toll and the market suffers a sharp 20 percent correction in the second half.
5. The growth rate in China slows to 6 percent due to Third Plenum policies to rebalance the economy toward the consumer and away from dependence on investment spending.
6. Emerging market investing continues to be treacherous.
7. The price of oil will exceed $110 a barrel.
8. Agricultural commodity prices on the rise: Corn to $5.25 a bushel, wheat to $7.50 and soybeans to $16.
9. Higher inflation causes yield on 10-year U.S. Treasuries to rise to 4 percent.
10. President Obama’s Affordable Care Act has a turnaround as computer access problems are diminished and young people sign up, a plus for the Democrats in the November elections.
1. Ted Cruz emerges as front-runner for the 2016 Republican presidential nomination.
2. Bitcoins collapse.
3. President Obama opens diplomatic relations with Cuba.
4. Hillary Rodham Clinton decides not to run for President in 2016.
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