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Wien: 'Favorable Trends' in Financial Markets Likely to Continue

By    |   Monday, 08 December 2014 08:15 PM

The news for financial markets this year has mostly been good, with major stock indices repeatedly rising to new highs, most recently last Friday. 

And Byron Wien, vice chairman of Blackstone Advisory Partners, thinks the good times can keep rolling next year. 

"Looking ahead, there is reason to think that the present favorable trends will continue," he wrote in a commentary. Employment data is strong, with the unemployment rate at a six-year low of 5.8 percent. 

"Consumer confidence is rising, and retailers are hiring aggressively in anticipation of a strong Christmas selling season, fueled partly by lower gasoline prices," Wien says. 

"The level of inflation remains low, which should help consumer spending." Consumer prices rose 1.7 percent in the 12 months through October.

As for risks, a recession in Europe is one, Wien said. "Hopefully Mario Draghi and the European Central Bank will become more accommodative and provide the funds necessary to keep Europe on the modest growth path," he wrote. 

"Japan will also need a new round of stimulus to keep out of recession. . . . China is still not rebalancing the economy toward the consumer sector, which is a necessary step toward continued growth.

There are more uncertainties on the geopolitical side than the economic side, Wien wrote.

But MarketWatch chief economist Irwin Kellner doesn't have such a rosy view of the U.S. economy.

While official GDP numbers show the economy averaged annualized growth of 4.3 percent in the second and third quarters, "according to the man on the street, this is hard to believe," he writes.

Kellner notes that October's 5.8 percent unemployment rate was "far from full employment." The jobless rate remained at that level in November.

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Byron Wien, vice chairman of Blackstone Advisory Partners, thinks the good times can keep rolling next year for financial markets.
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2014-15-08
Monday, 08 December 2014 08:15 PM
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