BlackRock Inc.'s vice chairman and chief investment officer for global equities, Bob Doll, has unveiled his top ten predictions for 2010, forecasting a U.S. economy recovering faster than its developed market peers.
He also gave a peek at what he thinks will play out over the next decade but quipped, "people aren't going to remember what you said in 10 years."
Doll said 2009 was his best in the past 15 years, with a self-scored success rate of roughly 95 percent for 2009. That compared to an average of 70-80 percent.
BlackRock is the world's largest money manager with $3.2 trillion under management as of Sept. 30.
Doll's 2010 predictions:
• The U.S. economy grows above 3 percent in 2010 and outpaces the G-7.
• Job growth turns positive in the United States early in 2010, but the unemployment rate remains stubbornly high.
• Earnings rise significantly despite mediocre economic growth.
• Inflation remains a non-issue in the developed world.
• Interest rates rise at all points in the Treasury curve, including fed funds.
• U.S. stocks outperform cash and Treasuries and most developed markets.
• Emerging markets outperform as emerging economies grow significantly faster than developed regions.
• Health care, information technology and telecommunications outperform financials, utilities and materials.
• Strong free cash flow and slow growth lead to an increase in M&A activity.
• Republicans make noticeable gains in the House and Senate, but Democrats remain firmly in control of Congress.
Predictions for the next 10 years:
• U.S. equities experience high single-digit percentage total returns, in the range of 6 percent to 8 percent annually, after the worst decade since the 1930's.
• Recessions occur more frequently during this decade, rather than only once a decade as occurred in the last 20 years.
• Health care, information technology and energy alternatives are leading growth areas for the United States.
• The U.S. dollar continues to become less dominant as the decade progresses.
• Interest rates move irregularly higher in the developed world.
• Country self-interest leads to more trade and political conflicts.
• An aging and declining population gives Europe some of Japan's problems.
• World growth is led by emerging market consumers.
• Emerging markets weighting in global indices rises by 10 percentage points.
• China's economic and political ascent continues.
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