10 Prediction for 2012 from BlackRock’s Bob Doll

Courtesy of www.econmatters.com.

By EconMatters

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:

1. The European debt crisis begins to ease, even as Europe experiences a recession. 
2. The US economy continues to muddle through yet again.  
3. Despite slowing growth, China and India contribute more than half of the world’s economic growth. 
4. US earnings grow modestly, but fail to exceed estimates for the first time since the Great Recession.  
5. Treasury rates rise and quality spreads fall.  
6. US equities experience a double-digit percentage return as multiples rise modestly for the first time since the Great Recession. 
7. US stocks outperform non-US stocks for the third year in a row. 
8. Dividends and buybacks hit a record high. 
9. Healthcare and energy outperform utilities and financials. 
10. 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 below):

• 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.  

Related Reading – BlackRock’s Crystal Ball into 2010 and the Next Decade

The views and opinions expressed herein are BlackRock’s own, and do not necessarily reflect those of EconMatters.

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