Thursday, 31 July 2014
Last updated 7 hours ago
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.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…