Tags: bob doll | stock market | predictions | economy

Bob Doll's Crystal Ball For 2013 Is Looking Mostly Accurate

By    |   Monday, 21 Oct 2013 06:28 PM

Bob Doll, chief equity strategist and portfolio manager at Nuveen Asset Management, is not afraid to issue his own report card when it comes to his 2013 stock market predictions.

In a report cited by Investment News,
Doll said he has “turned a corner on a few of the predictions and anticipate others will continue to lag our original estimates.”

However, the current state of his 10 predictions for the year shows he is probably being a bit too modest.

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Doll forecast the U.S. economy would “muddle along” with nominal growth below 5 percent, and the update is that GDP growth was only 2.5 percent for the second quarter and nominal growth was only 3.1 percent. Sub-par growth appears nearly certain from here.

He also predicted Europe would exit its recession – the jury may still be out on that, but growth there is accelerating and European stocks are certainly booming in the meantime.

Doll predicted most successfully that the U.S. yield curve would steepen, that U.S. stocks would hit record highs, that U.S. multinational stocks would perform domestic-only ones, and that dividends would grow at a double-digit rate.

A big cloudier in his crystal ball was his assertion that emerging markets would outperform developed ones. In fact, emerging markets had a dismal first half, but came back to beat developing ones by 2.4 percent during the third quarter.

Also, Doll predicted a U.S. manufacturing renaissance would continue. The latest manufacturing numbers show ISM figures grew in September over August, but the full-year outlook may still be murky.

Doll’s biggest miss was his forecast that the U.S. government would pass a $2–3 trillion 10-year budget deal. Given the temporary funding band-aid that ended the recent government shutdown, he now says, "This prediction won't materialize as a result of any 'grand budget bargain.'"

He also predicted, perhaps incorrectly unless trends reverse themselves soon, that large-cap stocks would outperform small-cap ones in 2013. So far with less than three months to go, large-caps are lagging small caps, returning 20.8 percent versus small-caps at 27.7 percent.

The International Monetary Fund (IMF) recently trimmed its 2013 global growth forecast by 0.3 percent to 2.9 percent, blaming weaker-than-expected expansion in emerging markets. CNN Money reported the IMF figures showed the world economy has seen no acceleration in the past twelve months.

Reuters said the Federal Reserve’s latest Beige Book report suggested economic momentum was solid into early October, although confidence had grown cautious due to Washington, D.C. budget battles.

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Bob Doll, chief equity strategist and portfolio manager at Nuveen Asset Management, is not afraid to issue his own report card when it comes to his 2013 stock market predictions.
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2013-28-21
Monday, 21 Oct 2013 06:28 PM
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