2015 was characterized by negative earnings surprises, a strong dollar, weak oil, and a bizarre political cycle, among other things. Will 2016 be more of the same?
Bob Doll, Nuveen’s senior portfolio manager and chief equity strategist, provides his top 10 predictions for the year.
Overall, Doll believes it’ll be a “muddle-through” kind of year.
“There are going to be good weeks and bad weeks—both for economic growth, for earnings, and therefore for the performance of the stock market,” he said during a media briefing in New York on Thursday. “There aren’t a lot of table pounders, in terms of trying to find reasons we’re going to have a big up or, I would argue, a big down market either.”
And especially in light of today’s news, China will be one wild card to watch this year. Chinese stocks were down 7 percent Thursday, prompting a halt in trading after just 29 minutes.
“I think what’s exacerbated it all are more technical issues related to the market. For example, a market that’s down 7 percent and closes punishes liquidity and results in lower prices, not higher prices,” Doll said. “I believe if the market had stayed open in China today, that probably the market would be down less than 7 percent, rather than 7. When people don’t have liquidity, you know what they do? They head for the hills as quickly as they can.”
We can expect some contagion from the country’s markets.
“As long as China is falling, do not expect equities anywhere to move up,” he said.