It has to be more fun writing for a stock market web site like MarketWatch.com. Seems like every day they have a column suggesting an imminent stock market crash, and at least one other column talking about likely explosive growth in stock prices. Both can't be right, but you'll seldom see an article with a title like: "Wow, we were dead wrong 6 months ago! "
Stock market news sites also seem to carry few articles expecting the market to go up or down a measly few percent over the next half year -- even though that is what usually happens.
So, please give me a few 'pity points' for posting quite boring ,mildly positive forecasts month after month. They have been pretty accurate, but still boring. Add a few more pity points because the economic factors I look at suggest a couple more years of boringly positive stock market behavior.
Worse still, when these 6 month stock market forecasts eventually turn sharply negative, both of my loyal readers will almost certainly think I have gone nuts. Most likely the stock market still will be surging up, but my six month forecasts will be screaming that the sky will soon be falling. Month after month. I expect to appear quite foolish.
Then, thud.
Saturday, October 14, 2017
Wednesday, October 4, 2017
Coming 6 months slightly better than average for stocks
October, 2017 expected gains 1.8%.
October, 2017 through March, 2018: Probable 5 percent gain.
The consensus of my forecasting models is that U.S. stock market will rise over the coming half year. The likelihood of at least breaking even is about 97% -- That is significantly better than the long term market track record of breaking even 74% over all 6 month periods since 1984. The projected 6 month market gain is about 5%. That's nice, but only slightly better than the long tern average gain over any 6 month period of 4.8%.
The models' forecast of very strong gains in the coming month (1.8%) is unusually positive.
The wild cards, however, are any changes to the U.S. tax code which may get pushed through the Republican-majority Congress. These models cannot figure what, if any, positive or negative impacts tax changes could mean for business. Passing major tax law changes isn't easy. The last major restructuring of tax law occurred in 1986.
Without any major positive or negative catalyst, my models expect the stock market to just keep chugging along. Financial markets are generally calm. We are moving into the winter months which have historically been better for the market than summer months. Recession is unlikely soon. Interest rates remain historically low. The Federal Reserve intends to raise interest rates only very, very slowly. Inflation is still steady and low. All of these are positives for the stock market. But, there is very little reason to expect any big jump in stock prices, as valuations are lofty.
October, 2017 through March, 2018: Probable 5 percent gain.
The consensus of my forecasting models is that U.S. stock market will rise over the coming half year. The likelihood of at least breaking even is about 97% -- That is significantly better than the long term market track record of breaking even 74% over all 6 month periods since 1984. The projected 6 month market gain is about 5%. That's nice, but only slightly better than the long tern average gain over any 6 month period of 4.8%.
The models' forecast of very strong gains in the coming month (1.8%) is unusually positive.
The wild cards, however, are any changes to the U.S. tax code which may get pushed through the Republican-majority Congress. These models cannot figure what, if any, positive or negative impacts tax changes could mean for business. Passing major tax law changes isn't easy. The last major restructuring of tax law occurred in 1986.
(Click on image to enlarge.)
Without any major positive or negative catalyst, my models expect the stock market to just keep chugging along. Financial markets are generally calm. We are moving into the winter months which have historically been better for the market than summer months. Recession is unlikely soon. Interest rates remain historically low. The Federal Reserve intends to raise interest rates only very, very slowly. Inflation is still steady and low. All of these are positives for the stock market. But, there is very little reason to expect any big jump in stock prices, as valuations are lofty.
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