2010 ended in bullish fashion on Wall Street as the Dow climbed nearly 2,000 points from its July low and looks to end the year up 10%. The Nasdaq has enjoyed even bigger gains, surging 26% over its last five months and recapturing levels unseen since December 2007.
Having put half of my 401(k) into stocks for the first time since the 2008 crash, I feel pretty confident about 2011. I would say we could go up another 10% or more by the end of 2011. If forced to give a Dow number, I’d say 13254 on the high end and 12400 on the low end by this time next year.
Gold will hit $1,500 an ounce and oil will blow through $100 a barrel. Although these may seem obvious to some, it wasn’t so obvious when I started calling these prices four years ago when gold was $600 an ounce and oil was $40 a barrel; it’s going to be at the hands of a struggling U.S. dollar. Pressure to China to “float” the yuan will only make the target for both gold and oil to go up.
Happy investing in 2011!
Pipe dream turned prediction: both GM and Chrysler turn investor darlings in 2011. The erstwhile “Government Motors” repays most of our $50 billion investment. Chrysler launches a successful IPO and begins repaying its government handout too and gets the most respect since Lee Iacocca.
We taxpayers need $46 a share from the remaining stock we own to break even. I predict the stock gets close in 2011. The microscope GM is under proves just what it needs with quality products to sell and focus on quality and profit, not market share. GM CEO Dan Akerson does a reasonable Alan Mulally impression (non- car guy turned auto savior) and the triumvirate of Akerson, diligent, seasoned money man CFO Chris Liddell and soul-of-GM President Mark Reuss challenges Ford's Mulally, Mark Fields and Jim Farley for best leadership team in Detroit. GM has the size, products and passion to make big profits. If you doubt the passion, you should have been on the floor of the NYSE as I was with Mark Reuss (son of a long-ago GM prexy)…an engineer with motor oil in his veins and tears in his eyes as the company re-launched. When was the last time a GM exec cared enough to cry?
As good as Ford has been and GM can be, the world thinks the best CEO in Detroit is at Chrysler. Sergio Marchionne brought Fiat back against greater odds than Mulally at Ford. I've personally witnessed how hard he's been whipping the horses, with most execs working two or three jobs. In 2011 it starts to pay off. Instead of flashy design remakes, Chrysler has been going at it the old fashioned way: trying to build better cars, improving both the inside and the ride. The wag who said Chrysler/Dodge interiors looked like “something done by the Romanians under Ceaucescu” was right, but with 16 remakes/relaunches, not anymore. Fiats and Alfas get traction in the US...especially when gas prices jump. Jeeps are hits on the world stage. Chrysler's IPO is smaller but near as successful as GM's. Fiat feels good enough to up its Chrysler investment and we all start to get our bailout money back...a bailout that looks a lot less like handout and more like investment.
Along with the Asian Carp czar, the weatherization czar, and the dozens of other government czars, the Administration will appoint a deficit czar. Not.
I predict deep into the year the Fed, through mental telepathy or a hidden word woven through a statement, will transmit the idea that it will start tightening rates by .0000001 of a percent during the year.
White metals: silver, platinum and palladium will rise further.
Gold will NOT hit $4,000 an ounce as so many have predicted (sorry Peter Schiff! :+)
Despite much bellyaching, the tax code will *not* be simplified.
The Russell 2000 will outperform the Dow.
And finally, Warren Buffett will continue to make money!
The president will become frustrated with his loss of control of the Congress and will begin to use administrative agencies and unconstitutional powers given to his predecessors and rule by decree
The U.S. will continue its march toward becoming a police state.
Ron Paul will run for president and terrify the 'big government' Republicans with his support in the polls and fund-raising prowess.
The Yankees will finish third in the AL East since they have only one reliable starting pitcher.
UPS and FedEx will enter into a bidding war for the Unites States Postal Service. The deal is close, but unions balk.
U.S. markets rally as the president moves more to the middle and businesses realize they have two years to prove friendlier policies work for everyone. Plus history is on side of market see 1984, 1952, 1920 and 1893.
-- Dollar will strengthen to $1.15/Euro by year’s end
-- Either Greece, Ireland or Hungary (or multiple) will default (continuation of 2010 prediction)
-- The S&P will rise, but NOT by more than 10%
-- Gold will end the year lower than it begins it
-- The Fed will raise interest rates at least once in 2011
-- At least two of the Dow 30 CEOs will be forced to resign
-- A spaniel will win the Westminster dog show
-- The Mets will finish under .500
I predict the video store around the corner from my house still renting VHS tapes may have a difficult 2011. Watch out for 2012 though. That's when VCRs go retro!
I think that 2011 will be a relatively tame year compared to what we have seen since 2007. There is plenty of fear out there. From a second dip in housing and European contagion to a self-imposed, government-run slow down of the Chinese economy and states in fiscal crisis. Much could go wrong, but I have the sneaky suspicion we will be talking about many of these same fears a year from now. The U.S. stock markets will experience a gradual ascent by year end as fears continue to subside.
Unemployment will remain elevated and there will be significant pressure to extend unemployment benefits for the growing list of long-term unemployed. The left will claim compassion. The right will claim the theoretical benefits of removing the unemployed from the government crutch. It may just end up being the loudest argument we hear on Capitol Hill.
The Chevy Volt and the Nissan Leaf will be more popular with their respective owners than many think, especially with gasoline prices climbing steadily higher throughout the year. What GM and Nissan learn through the millions of miles these vehicles are road tested by the public will lead to significant improvements in the years to come.
Tiger Woods is back and sponsorship money will follow. The Lakers play the Heat in the NBA finals, which will garner the third highest ratings in finals history.
Stuart Varney WILL buy Chris Cotter lunch. It WILL happen.
I have trouble predicting what's going to happen later today, but I will say that 2011 feels like it will finally be the year of economic recovery. The table is set for higher corporate profits and even some political compromise. In a perfect world, that finally translates into sustained job growth. The world, of course, is far from perfect and if we don't get this right the long-term consequences are severe. China won't stop rising and 2011 may be the year it transitions from a source of cheap labor to a hotbed for innovation and education. We have to get this right, so we will. Optimism is more productive than pessimism. I can even see the New York Mets playing in the 2011 World Series. OK, maybe that's a little too much optimism.
Experts I talk to say we will see Dow 12000 before Dow 10000
Things are finally looking up for the U.S. economy:
A growing pool of evidence points to much higher economic growth and even higher stock prices next year. The causes go well beyond low interest rates, higher capital levels at banks or even the latest pickup in retail sales.
It's always risky to predict economic gains with the community-organizer-in-chief still in the White House and businesses grappling with his "signature achievement," ObamaCare. The new Congress also could fail to live up to vows to cut spending -- cuts we need if the markets and the economy are to improve beyond current predictions.
But if incoming House Budget Committee Chairman Paul Ryan and his allies do half of what they're promising, even a pessimist like myself has to concede that the positive signs for the economy and the markets clearly outweigh the negatives for the economy and the markets in 2011. Consider:
2010 ended in bullish fashion on Wall Street. We offer our best guesses on what the New Year will bring.