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Which Bob Doll Economic Predictions for 2015 Were Right or Wrong?

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Many advisors and investors follow the yearly predictions of Robert Doll, chief equity strategist of Nuveen Asset Management.

In 2015, the portfolio specialist expected investors “to transition from ‘skepticism’ to ‘optimism’ as we experienced” several improvements in the economy, Doll explained in his recap of the past 12 months.

Specifically, he anticipated solid momentum in U.S. economic growth and low inflation; an uptick in consumer spending tied to job growth, confidence and “a positive wealth effect; solid earnings growth, stimulus from low commodity prices and financing costs; as well as “a still-good liquidity environment aided by stimulus from non-U.S. central banks.”

How did the realities of 2015 jibe with Doll’s predictions? Read on to see what the seasoned investment analyst got right and wrong for the year.

1. U.S. GDP grows 3% for the first time since 2005.


“Growth averaged 2.2% over the first three quarters,” Doll said, citing data from the Commerce Department. That was “slightly less” than he expected.

“We believe growth will accelerate modestly next year,” he explained.

2. Core inflation remains contained, but wage growth begins to increase.


Thanks to falling energy (and other commodity) prices, inflation levels have been low in 2015. Still, we “have been seeing indications that inflation may start to creep higher,” Doll states.

“The latest reading from November shows average hourly earnings rose 2.3% year-over-year,” he explained, pointing to research from the Labor Department. Fed chief Janet Yellen. (Photo: AP)

3. The Fed raises interest rates, as short-term rates rise more than long-term rates.


“It took until the end of the year, but the Fed finally increased rates in December,” said Doll.

Overall, the yield on the 10-year Treasury is largely unchanged for the year. The yield on the two-year, though, rose from 0.66% to 0.95%.

4. ECB institutes a large-scale quantitative easing program.


The ECB launched its massive QE program in January and expanded its bond purchases at the end of the year. The central bank is continuing to look for ways to promote growth in Europe. Man in China looking at stock board. (Photo: AP)

5. U.S. contributes more to global GDP growth than China for the first time since 2006.


Doll and his colleagues anticipated that China’s economic growth would slow in 2015. Still, he says, they have been “surprised by the magnitude of the decline.”

Through mid-December, the United States has contributed $448 billion to global GDP vs. $390 billion from China, Doll says, citing data compiled by Morningstar Direct, Bloomberg and FactSet (as of Dec. 18).

6. U.S. equities enjoy another good yet volatile year, as corporate earnings and the dollar rise.

Sort of Right/Sort of Wrong

“Whether we get this one correct will depend on if the volatile equity market finishes in positive territory,” Doll said when he released his recap last week.

The Dow Jones Industrial Average headed into Monday’s trading session down 1.5% year to date.

Corporate earnings so far in 2015 “have been mixed,” Doll admits. Plus, the energy sector has been “dragging down overall results.”

In contrast, the dollar’s value increased sharply this year and was up 9.3% as of Dec. 18. Oil worker in Bahrain. (Photo: AP)

7. Technology, health care and telecom sectors outperform utilities, energy and materials.


Doll says he and the team at Nuveen were “most correct” on this prediction for 2015.

“Our preferred sectors handily outperformed our least favored ones,” he explained.

Sectors in the “outperform group” have improved 3.4% on average; those in the “underperform group” are down 13.4% through Dec. 18.

8. Oil prices fall further before ending the year higher than where they began

Half Right

“Oil prices were extremely volatile this year,” Doll said.

Plus, he argues, since prices were higher than their starting point ($53) at several points this year, the team got this prediction “half right.”

However, it can also be argued that given the sharp downturn of oil in recent weeks – and its trading at around $36 – that his call on oil prices missed the mark. Traders on the floor on the NYSE. (Photo: AP)

9. U.S. equity mutual funds show their first significant inflows since 2004.


In contrast to prediction 7, Dolls says this view “is the one on which we are ‘most wrong’,” he explains.

Through November, equity fund flows have been negative,according to various research groups, “which makes the relative resilience of equity prices quite impressive,” the Nuveen portfolio manager adds.

Morningstar’s estimates for fund flows in November, for example, include outflows of $6.7 billion for equity funds. For the past 12 months, these outflows total an estimated $56.3 billion.

10. Republican and Democratic presidential nominations remain wide open.

Half Right

Though not specifically about the economy, the results of the election in 2016 will certainly affect the economy.

“Hillary Clinton remains the front runner for the Democratic nomination, but she has yet to solidify her polling numbers,” Doll stated.

Meanwhile, the GOP race is “almost impossible to predict,” according the analyst.

While Doll can argue that Clinton’s polling numbers may not be “solid enough” to give her the nomination, she is the party’s presumed nominee, according to a wide variety of news sources, and has a big lead in polls in Iowa and New Hampshire.


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