Five top Wall Street strategists and fund managers predict another volatile year for investors in 2016: a handful of rate hikes, more market volatility, a possible cliff dive for share prices and continued hot tech stocks.
According to five top Wall Street strategists and fund managers who peered into their crystal balls for USA Today, next year you can expect:
- Another potential 10% correction.
- As many as four interest rate hikes from the Federal Reserve.
- The chance to book gains overseas where stocks are cheaper and central bankers remain market-friendly.
- A still-hot technology sector gaining followers due to disruptive technologies, peppier sales and more robust earnings growth.
“Returns in 2016 will be a tug-of-war between rising interest rates and a continued uptick, albeit modest, in U.S. economic growth and a rebound in corporate earnings driven mainly by the U.S. consumer,” USA Today reported.
"Stock market predictions for 2016 range from a replay of this year's flat market to plump double-digit gains as investors brace for higher interest rates and less support from the Federal Reserve," USA Today reported.
Highlighting the 5 experts:
Meanwhile, Goldman Sachs
- “The most skeptical, downbeat market prognosticator was David Kostin, the chief U.S. equity strategist at Goldman Sachs,” USA Today wrote. He is calling for a "bifurcated" market, with winners (U.S.-centric stocks and consumer-focused names) and losers (stocks with high foreign exposures or weak balance sheets).” Kostin predicts the U.S. central bank will boost interest rates, now pegged near 0%, a quarter point later this month and then will follow up with four more quarter-point increases next year.
- Jeff Moser, manager of the Wells Fargo Large Cap Core Fund, said stocks could climb as much as 10% next year. "Something above the long-term average, so we may get to double-digit returns," he says.
- "We think the bull market will continue," said Kate Warne, investment strategist at Edward Jones. "We are just saying that we will get the earnings growth and the economic growth that drives stocks higher." Warne said stock investors should expect another 10% correction, or drop in stock prices, like the one this past August, as well as smaller 5% dips from time to time, USA Today reported.
- Josh Spencer, manager of the T. Rowe Price Global Technology Fund, says the small handful of big tech stocks (Netflix, Google and Amazon) will do well again next year. "We will see a healthy market, a broader market, and fairly strong performance from tech in 2016."
- There are also opportunities for U.S. investors to venture abroad and make money in stocks overseas, says Russ Koesterich, global chief investment strategist at BlackRock. "It's probably always a good idea to look overseas," he said.
analysts have seen the future, at least into next year, and it's not pretty. In fact, the predictions are so dismal, Fortune described them as "incredibly depressing."
reports that Apple, CVS Health, and General Motors are among the best investment bets for the year ahead.
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