Smalltime's 2014 Economic Outlook

My quick cast says at years end we will have: S&P 500 @ 2110, DJIA @ 19,560, NASDAQ @ 5400, Gold @$725, Silver @12.50. This only happens if geopolitcal tensions remain in check. It happens because corporate profits will benefit from Obamacare, the domestic energy boom, and fiscal clarity in Washington. Monetary policy will continue to be loose with stimulus tapering based on the unemployment numbers. The fed is currently buying a mix of shorter term US treasury bonds and mortgage backed securities on the secondary market to the tune of $75 billion a month.

A series of high profile mergers and acquisitions will occur. The flood of stimulus $$ from the fed will reach the market in earnest in 2014 as large banks work around the new trading rules set forth by Dodd-Frank. The Japanese stimulus and the return of the carry trade in force by summer, as the yen creeps lower towards 110-115 per dollar, will also propel world markets. The devaluation of major currencies could also create a very hard fall in subsequent years, but in 2014 it will continue to propel equities worldwide. Technological advances will continue in multiple industries as the internet becomes the backbone of world commerce.