The year that was is quickly morphing into the year that will be. All signs are that 2015 will be as good as, or better than, 2014, and, despite the ups and downs in the market, 2014 will turn out to be quite a good year. It appears my “prediction” that the Dow will finish above 18,000 is on track and my prediction that the S&P 500 will finish above 2050 looks to be a bit off. In fact, it appears as if the number will be above 2075.
- Asian stocks edged higher on Thursday as fresh signs of resilience in the U.S. economy offset some of the gloom over a weakening global outlook, while the euro wallowed near two-year lows before a much-anticipated European Central Bank meeting.
- European Central Bank President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the $13 trillion euro zone economy.
Chinese and European markets are reacting to what I said would happen – both would begin to follow the momentum of the US economy, meaning, the powers that be will do what it takes to get the economies on track. The only question market is the other Asian power – Japan.
- Japanese stocks rose for a fifth day, with the Topix index closing at a seven-year high after data showed renewed momentum in the U.S. economic recovery and the yen touched its weakest since 2007. Carmakers advanced.
Japan is no different. Abenomics is the ingredient that will change the Japanese economy, and when it kicks in fully in conjunction with a European recovery, and China, well, does what China does – a 7% GDP growth rate – the talk of 2015 will not be that deflation is killing the global economy; rather, it will be, inflation is on the radar of the central banks round the globe.
So, what will 2015 bring specifically? Economists of all stripes have their predictions, and we will be seeing plenty of those in the next three weeks, but, in the meantime, here is one early take on “many” of those already out.
- Many consensus forecasts for 2015 are much as they were for 2014 – a stronger dollar, higher yields on U.S. Treasury and other government bonds, an outperforming U.S. economy, further gains in global stocks, and central banks doing whatever it takes to prevent low inflation turning into deflation.
Keep in mind, many of the economists’ predictions in 2014 were, well, let’s just say they missed the mark, so we should all take those for 2015 with a grain of salt. However, looking to bolster my “prediction” that 2015 will be equal to or better than 2014, I chose the one above, as it most closely resembles my thinking on the matter.
Funny how that works, eh?
Trade in the day; invest in your life …
