Predicciones de Bob Doll para 2009
1. The US economy faces its first nominal GDP decline in 50 years.
It is likely that the fourth quarter of 2008 will be the sharpest quarterly decline for this recession. However, growth will remain negative for at least the first half of 2009. The second half of the year is likely to be either side of, but not far from, zero growth. Declines in wealth, rising savings rates, tight lending standards, and rising unemployment are among the culprits. Moreover, with inflation levels falling to approximately zero, nominal growth will register a four quarter period of negative growth — with the largest dip probably extending from 4Q08 to 3Q09. This has not occurred since the early 1950s. Digging out of this will require success of the aggressive monetary and fiscal stimulus policies, stabilization of residential real estate and financial markets, and restored consumer, business, and investor confidence.
2. Global growth falls below 2% for the first time since 1991.
Growth everywhere in the world seemed flat to positive for the majority of 2008 and then fell off a cliff subsequent to the Lehman bankruptcy in September. Earlier notions of a global economic decoupling fell apart as the US consumer slowdown and global credit problems caused growth to slow everywhere. The recession in the US and Europe is serious in that it is related to a credit bust, which will take time to repair. Our view of the emerging markets slowdown/recession is a more ordinary inventory work down. Japan continues in its struggle to grow with low consumption patterns and a declining population. As a result, global growth is likely to fall to its lowest level in nearly 20 years. By mid-year, some recovery should be evident in the emerging world, with stabilization likely in the US in the second half and by the start of 2010 in Europe.
3. Inflation falls close to zero in many developed countries, but widespread deflation is avoided.
The decline in real estate prices, financial asset prices, and commodity prices, and generally poor real growth have all combined to suggest very low inflation rates for 2009. In the developed world, we expect inflation to fall to approximately zero for the full year and fall to below 5% in the developing world. Preventing a widespread decline in prices aggravated by the continued deleveraging process are aggressive monetary and fiscal stimulus initiatives which we expect will eventually prove successful. These actions will be aimed at averting a banking system collapse, containing economic contraction, sustaining credit flows to quality borrowers, facilitating restructuring or failure of weak borrowers and arresting the decline in money velocity. Eventual inflationary risks will be mitigated if the Fed withdraws reserves and raises rates as the velocity of money stabilizes and rises.
4. The US Treasury curve ends 2009 higher and steeper than where it began.
Treasury rates at all points of the yield curve have gone down to levels unthinkable by most investors not that long ago. This has been driven by the aggressiveness of the Fed’s collective anti-deflation toolkit as well as falling real growth and inflation. Our view is these reflationary efforts will eventually prove successful and that there will be enough evidence of success such that by year end, the yield curve will be higher than where it started the year. For this to transpire, fear needs to lessen and confidence needs to rise. One of the risks these efforts face is a declining dollar and/or rising rates, if foreigners become less willing to buy the massive amount of newly-issued US Treasury paper.
5. Earnings fall by a double-digit percentage again in 2009, the first back-to-back drop since the 1930s.
An earnings collapse began this past fall as the economy began to contract in earnest. Financial earnings totally disappeared. Cyclical areas were hit hard - initially the consumer sectors, more recently the industrial and multinational sectors. The average peak to trough run rate decline in earnings in post-World War II recessions has been slightly higher than 20%. Our belief is that the decline in this episode will be at least double the norm. Parenthetically, the decline in earnings in the Depression was about 70%. The decline this time will be a result of both revenue and margin pressures. As a result, earnings, which fell a double-digit percentage in 2008, will likely fall by a double-digit percentage again in 2009. This would be the first back-to-back double-digit percentage declines in earnings since the early 1930s. Hardest hit sectors in 2009 vs. 2008 from an earnings standpoint will be materials, energy, industrials, and information technology.
6. High yield, municipal and investment grade corporate bond spreads narrow in 2009.
Similar to our view that the yield curve rises in 2009, our view that spreads narrow is also predicated on the assumption that policy “works”. That is to say, as fear levels recede and confidence is slowly rebuilt, risky assets can begin to outperform safe assets once again. If true, this means that corporate, high yields and municipal spreads over Treasuries can begin to narrow from very wide levels. Current spreads are implying catastrophic results in terms of failures and bankruptcies. While we will undoubtedly experience notably elevated levels of bankruptcies, our view is that current spreads have overly discounted the risks and/or these spread markets are suffering from real liquidity problems. Because the yield differentials are so wide and rates of return on Treasuries are so low, we believe this prediction has reasonably high probability of becoming accurate.
7. US stocks record a double-digit percentage gain in 2009.
After a peak to trough decline of more than 50%, stocks discount a fair number of the negatives in the outlook. We also believe that a bottoming process began on October 10 and was further confirmed at a secondary low on November 21. With record fiscal and monetary stimulus, substantially lower oil prices, much cheaper valuations, significant negative sentiment and lots of cash on the sidelines, it is likely that stocks will begin to look “over the valley” sometime in 2009 and experience a noticeable rally. Like many of our predictions, this one is dependent on reflationary forces eventually winning out over deflationary ones. If we are correct in our assumption that an earnings rebound is likely in 2010 which becomes evident in 2009, a year-end S&P 500 target of 1000-1050 seems possible.
8. US stocks outperform European stocks while emerging markets outperform developed ones.
The US equity market outperformed most non-US bourses in 2008 due to the aggressiveness of monetary and fiscal policy as well as the defensiveness of the US (higher earnings predictability and lower volatility). These factors, along with earlier evidence of an economic bottoming process, should enable US stocks to outperform the European averages again in 2009. Europe has been slower to recognize the problems of economic stress as exhibited by still higher interest rates and a slower banking system clean-up process. Disunity of fiscal policy responses and population declines further argue for US outperformance. Similarly, we believe emerging markets will outperform developed ones. The economic slowdown/recession in emerging markets appears to be a more traditional inventory cycle rather than like the more structured downturn in the developed world. We also believe that the renewal of evidence in the long-term story for the emerging markets — namely, a growing consumer and middle class, rising productivity levels, and generally faster economic growth — should aid the recovery story for those geographies.
9. Energy, healthcare and information technology outperform utilities, financials and materials.
In general, we urge investors to hold quality stocks in their portfolios — companies with balance sheet strength, good cash flow characteristics, and some economic independence. Having said that, on rallies and eventually, lower quality companies will selectively outperform. Therefore, selective additions in periods of weakness are appropriate. From a sector standpoint, we prefer healthcare for defensiveness, information technology for some stability and some cyclicality, and energy for cyclicality and cheapness. We continue our cautious view on financials due to the structural and credit uncertainties, utilities due to their expensive valuations, and materials due to their severe earnings challenges.
10. Stock market volatility remains elevated as periodic double-digit percentage rallies and declines occur.
Volatility exploded in 2008 due to heightened uncertainty and fear. Simultaneously, correlations across asset categories and geographies rose significantly, in many cases approaching unity. Our expectation is that the uncertainties related to the struggle between debt-induced deflation and policy-induced reflation will result in continued volatility. While volatility levels are likely to recede from the records set in 2008, it is likely that 2009 will go into history books as a high volatility year. One manifestation of this is likely to be multiple double-digit percentage rallies and declines during the year.
11. Oil and other commodities bottom and move higher by year-end as emerging market economies begin to recover.
Among the areas recording the highest volatility in 2008 was commodities. Most commodities extended multi-year gains into 2008, peaked, and then experienced vicious declines. While the peaks were overdone on the upside, current levels may have overdone it on the downside. As visibility increases that the global economy will eventually stabilize, we expect commodity prices to find a bottom and begin to move higher. Oil holds a particular fascination for us, having peaked at nearly $150 per barrel at mid-year only to fall to below $40 toward year end. Our guess is that equilibrium prices are somewhere in the $60-80 price range. Getting back to these levels will depend in part on having visibility on the end of the slowdown in growth in the emerging markets.
12. The US federal budget deficit soars past $1 trillion as the government continues to grow.
While necessary for stopping the deflation threat and re-stimulating growth, the consequence of massive fiscal stimulus packages is a rapidly growing federal budget deficit. We expect the federal budget deficit will cross the $1 trillion threshold both through massive spending programs and through reduced tax receipts as a result of the recession. In addition, state and local government budget shortfalls will become acute while facing increasing demands for spending. These jurisdictions do not have the flexibility the federal government does to run unending deficits. Ancillary consequences of the federal budget deficit will be limits to the Obama administration’s ability to satisfy all the campaign initiatives promised as well as eventual massive tax increases. Risks to this exploding deficit include higher interest rates, a lower dollar, and eventual inflation.
Consulta el informe completo en el Bob Doll también analiza las predicciones que hizo para 2008 y su resultado