Saturday, 31 January 2015
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Jan 4 2011 | 1:27pm ET
The ball drop in New York's Times Square may signal the new year for most Americans, but on Wall Street, it hasn't really started until the Blackstone Group's Byron Wien drops his annual list of 10 "surprises."
The former Morgan Stanley and Pequot Capital Management strategist predicts continued economic growth in the U.S., with real gross domestic product growth rising about 5% and unemployment sinking below 9% in 2011. But at a price: The increasing budget deficit will push the yield on 10-year U.S. Treasuries to almost 5%.
Stocks and gold will also be good bets, Wien said, with the Standard & Poor's 500 Index nearing its old high-water mark of 1,500 in the first half before a correction in the second half. Stay away from telecommunications and utilities, Wien advises, but event-driven hedge funds should have a field day due to "intense" mergers and acquisitions activity. Gold, meanwhile, will rise above $1,600.
The housing situation will improve and oil prices will rise this year. Wien also predicts that rising standards of living in the developing world will push up agricultural commodity prices.
On the political front, Wien expects U.S. President Barack Obama to accelerate the withdrawal of troops from Afghanistan, with most coming home by the end of the year, after concluding that there is little the U.S. can do to prevent the country's relapse into a tribal state ruled by warlords. He taps German Chancellor Angela Merkel as likely to push through European financial reform, including more bailouts of weaker European Union countries, and notes that China will aggressively manage the value of the renminbi to limit economic growth to below 10%.
Each of those 10 bets carries a better than 50% chance of coming true, Wien says. His predictions for last year, however, didn't come anywhere near 50% accuracy; for one, his first predictions for both 2010 and 2011 were the same—GDP growth of 5% and unemployment below 9%. He also missed on Federal Reserve rate hikes, higher yields on 10-year Treasuries (sound familiar?), the S&P500, the yen, Japanese growth, the 2010 elections (Democrats only lose 20 seats) and the Iranian political situation.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…