Bob Doll, chief investment officer at the world's biggest money manager-- BlackRock ($3.6 trillion in assets), who has produced an annual prediction for over a decade, just published his 10 predictions for 2012:
- The European debt crisis begins to ease, even as Europe experiences a recession.
- The US economy continues to muddle through yet again.
- Despite slowing growth, China and India contribute more than half of the world’s economic growth.
- US earnings grow modestly, but fail to exceed estimates for the first time since the Great Recession.
- Treasury rates rise and quality spreads fall.
- US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession.
- US stocks outperform non-US stocks for the third year in a row.
- Dividends and buybacks hit a record high.
- Healthcare and energy outperform utilities and financials.
- Republicans capture the Senate, retain the House and defeat President Obama.
Doll sees a 2012 recession in Europe, but China, India and the United States are three bright spots accounting for two-thirds of global GDP growth. The United States faces headwinds, but a recession is not expected with GDP growth of between 2% and 2.5% and QE3 is unlikely. The big risk remains that of a financial breakdown in Europe.
Regarding specific market and investing strategy, Doll noted In a separate Nov. 2011 CNBC interview (clip here):
- Adding stocks on weakness into the lower part of 1100-1250 range
- Continue to favor the U.S.
- Sector focus: Healthcare and Technology
Doll typically is biased towards the bullish side, but like many other fund managers and analysts, he is very bearish on Europe for 2012.
Doll's prediction of a third straight double-digit gain of U.S. stocks in 2011 fell short (by a lot); but on the other hand, BlackRock is a $3.6-trillion 'market force' worthy of at least some attention from investors.