by Eloy Yndigoyen (The Campus Investor)
10. Continued Outrage of Corporate Profits & Bonuses
– Remember that announced bonuses from all the major Wall Street firms will soon be doled out in January and February; will we start to see the outrage the media loves to pump up?
9. Do we double dip?
– No, I’m not talking about the Costanza incident on Seinfeld. I’m talking about the economy going back to levels we last saw in March 2009. Many prominent economists are predicting this will occur…only time will tell.
8. Which way will crude oil prices go?
– Consumers had a little bit of a break at the beginning of last year in lower prices at the pump. That has since vanished as oil prices regained there footing, finishing the year at $79.62. It will be interesting to see if we get another run up toward $100 if the global economy starts to pick up speed.
7. Does the Gold bubble finally pop or continue higher?
– Everyone’s seen the TV ads for Cash 4 Gold and there are even ways to host your own gold party at home. Is this the sign of a market top or will geopolitical problems and/or weak trust in government policies continue to send this precious metal higher?
6. Does the US Dollar continue some of its strength we saw it regain at the end of the year and continue marching higher?
– If this does occur how will it impact commodity prices and the overall stock market. We have become accustomed to seeing a falling dollar and rising stock market but will this trend continue?
5. When does unemployment peak?
– We are currently at 10% unemployment while 18% are underemployed, neither of these are good for the economy’s future, however if we start to see some job growth at the beginning of this year all bets are off for how far this market can go.
4. Has the housing market finally stabilized?
– Lots of data says so but many are still skeptical since mortgage rates are more likely to go up in 2010. I believe the recovery will resume in certain spots of the country while continued pressure on areas like Las Vegas and California, two of my favorite party spots.
3. Does the bond market bubble start to burst?
– Bond funds were all the rage over the past year even with the gains in the equity markets many individual investors were too nervous to put there capital back to work. Will this trend reverse with the gains we saw last year in equities?
2. Do emerging markets continue to produce outsized gains?
– Emerging Markets were some of the best performers of last year after they were hit the hardest during the great recession. Many portfolio managers feel that EM’s give an individual investor the greatest potential upside even after the >60% returns in 2009.
1. Just when will the Fed raise interest rates….
– Goldman Sachs sees the slow nature of this recovery halting the raising of Fed Funds until 2012, by far the most conservative forecast out there! If rates start going up like many of the other research teams say they will, it will be interesting to see if the market starts to give back some of its gains of 2009.