Blackstone's Wien Offers '10 Surprises'

Jan 3 2013 | 11:16am ET

U.S. and European stocks will sink; Chinese and Japanese stocks, gold and agricultural commodities will rise; and Europe will remain mired in a recession, according to Byron Wien's annual "10 Surprises" predictions for 2013.

The Blackstone Group strategist has published every January since 1986. This year's top 10 is headlined by an Iran with nuclear capabilities.

On the financial front, Wien predicts that the Standard & Poor's 500 Index will give back much of its 2012 gains to trade below 1,300 points, and that financial stocks will give back all of their 2012 gains, with attendant layoffs and lower pay, coupled with more regulation and more litigation. European stocks will drop 10% as the continent's structural problems remain unsolved.

Wien sees better things for Asia, including a major effort to root out corruption in China and a 20% jump for "A" shares in Shanghai. He also sees a strong year for Japanese stocks, even if the country's economy remains lackluster and the yen weakens further.

Among commodities, Wien predicts good things for gold, grain and livestock, the former in spite of low inflation and the latter two due to growing demand and another year of crop failures due to climate change. Oil will continue its decline—Wien correctly predicted last year that it would fall to $85 a barrel during 2012, and now sees its drop to $70.

Politically, Wien predicts a major—and successful—effort by Democrats to wean the U.S. from Middle Eastern oil by the end of the decade, and an about-face by Republicans on immigration issues.

Wien also offered five "also rans"—predictions that don't make the 10 either because Wien does not believe they have at least a 50% chance of coming true or because those that did make the list were more compelling. Among them are predictions that the U.S. will pass gun control legislation, a 33% increase in volatility, a transaction fee designed to slow the growth of high-frequency trading, talk of a value-added tax and wealth tax in the U.S., and a wearying on the part of consumers on electronics.

Last year, Wien was an average prognosticator, hitting his predictions on oil, the S&P500, President Barack Obama's reelection, unemployment, Asian currencies and Indian stocks. He missed—badly—on his predictions that Congress would get its act together and strike a deal on the massive sequestration cuts, real gross domestic product growth, cyber terrorism and Chinese and Brazilian stocks. He also missed on his bet that Republicans would take the Senate and Democrats the House; both parties retained control of their sides of the Capitol in November.


In Depth

Will Liquid Alts’ Performance Sustain Future Asset Flows?

Aug 25 2014 | 10:34am ET

Liquid alternative investment funds saw the highest percentage of capital inflows...

Lifestyle

Hedgies, Economists and Musicians Mingle At Milkin Mixers In Hamptons

Aug 25 2014 | 6:00am ET

Leave it to Michael Milken to bring some gravitas and sweat to the Hamptons -- along...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.