2014: The Year the Economy Finally Clicks

Predictions: Looking ahead to the new year

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Germany Deutsche Boerse NYSE
Michael Probst/AP
By Patti Domm

Stocks rally on!

Stocks will rally in the coming year, but expect some major volatility. Lots of folks disagree, but I think that the 10-year Treasury yield will not be easily tamed, and it will rise above 3.5 percent as the Fed removes some stimulus. I think 4 percent could be on the horizon. That will make stocks skittish but if the economy is improving, as we hope, the bumps will give way to year-end gains. They won't be the dazzling gains of 2013, but maybe the S&P 500 will eke out a high-single-digit move.

Zero forever?

The Fed's efforts to assure markets it will keep short-end rates at zero for a long time actually works. The yield curve steepens, and by year-end, if everything is clicking, the market starts to look for a rate hike in 2015.

Half full!

OK, this has GOT to be the year. Let's hope we see growth accelerate because if it doesn't, I fear a dip. By the end of the year, we should see some heartier gains and an economy growing at 3 percent plus.

China to the rescue?

The odds are 50-50 that China restarts its growth engine in a meaningful way and boosts the world and regional economy. The new leadership needs to show it is making economic strides, as it flexes its military muscle in the region, and that could be motivation to get the economy humming.

Energized economy

The U.S. oil and gas boom is in full swing, and it will continue to affect energy producers around the world. OPEC, with more barrels of its own coming on line, struggles to keep control of prices. Here's a wild thought: the U.S. actually starts to embrace its rising position of power and the political implications of being less dependent on other sources. The Keystone pipeline gets approved, and WTI crude stays in a range under $110 per barrel.


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64 Comments

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betty_brock

Click................BOOM!

December 09 2013 at 2:37 PM Report abuse rate up rate down Reply
SPQR

where is FDR when you need him

December 09 2013 at 12:24 AM Report abuse +1 rate up rate down Reply
SPQR

2014 is the apocolypse

December 09 2013 at 12:23 AM Report abuse +2 rate up rate down Reply
betty_brock

I'm Evan / not too smart / richy / bad.
The truth really makes me mad.
I prefer the liberal spin.
I get dizzy again and again.

December 08 2013 at 8:53 PM Report abuse -1 rate up rate down Reply
1 reply to betty_brock's comment
mike

yeah, betty -- a never ending spin. one suspects liberals
and liberal media don't mean what they say.

December 08 2013 at 9:03 PM Report abuse -1 rate up rate down Reply
toosmart4u

Way to go President Obama on cleaning up the mess from the bush jr. administration. Look at the ratings of your congress controlled by the GOP. Lowest rating ever recorded. The GOP is looking after itself and the big money machine is pushing their policies. If you are drawing social security and medicare thank a democrat. If you want to end these two fine programs vote republican, that is how your leaders have voted.

December 08 2013 at 8:42 PM Report abuse -3 rate up rate down Reply
1 reply to toosmart4u's comment
betty_brock

Notoosmart, you really are delusional. Things were sooooooooo much better under President Bush.

December 08 2013 at 8:50 PM Report abuse +2 rate up rate down Reply
ldagda

Wow....either it\'s anti-liberal or anti-conservative here in the comments. The problem is NEITHER party has shown fiscal responsibility. They are in it for themselves and their own egos. Yet, someone keeps voting them in. We are ALL responsible. Wouldn\'t it be nice to have a fiscally conservative/socially moderate party? Instead, we are stuck with old white men (GOP) who think they know better than everyone and can tell you how to live and the etisitcal know it all liberal party that thinks they know better for you and don\'t believe you can do it on your own so they meddle. Gee...maybe there isn\'t a difference.

December 08 2013 at 7:07 PM Report abuse rate up rate down Reply
ldagda

I don\'t agree. I\'m out of a job after this month..company is closing....because of the economy. How many more struggled to get this far? Additionally, all the hiring is for holiday help..so there will be a big drop in January...People are not buying anything...especially large purchases that require financing because the banks are tight fisted under the new regs. I don\'t believe this at all. Sorry...just not there. I know too many people that are about to lose their jobs. The shutdown hurt a lot of companies...people were put on reduced hours to cut costs....it takes a few months for it to hit the economy...and it\'s hitting now and will for a few months. And I, many years ago, worked for a large company where one of the principals was on the economic commission...and he said that they would put out false information like this to keep the economy from getting worse by hopefully increasing people\'s expectations and lowering the worry.

December 08 2013 at 6:57 PM Report abuse +1 rate up rate down Reply
cut grass

With Obama\'s rating so low they are coming up with anything to get the peoples mind of track.

December 08 2013 at 6:22 PM Report abuse rate up rate down Reply
Charles

National debt continues to climb! True unemployment continues to climb as 'fake" numbers decrease slightly. Obamacare continues to destroy our national health and health industry. Stock market wull continue to rise along with inflation.

December 08 2013 at 6:17 PM Report abuse +2 rate up rate down Reply
1 reply to Charles's comment
betty_brock

We liberals hate to admit it but that is true.

December 08 2013 at 8:53 PM Report abuse +1 rate up rate down Reply
mike

who really writes this stuff? everyone knows that liberals have
no interest in an improving economy. geez!

December 08 2013 at 6:09 PM Report abuse +1 rate up rate down Reply