E Financial Forecasts – Myth Or Reality?

During a recent trip from San Francisco to Ohio, I spent several hours indulging in the Wall Street Journal, cover-to-cover. Fascinated by their second quarter Markets Review & Outlook Section on July 3, 2017, I fervently read the predictions made by pros compared with reality.

I assumed that at least one prediction for the markets for 2017 might have materialized. Yet, out of 8 economic predictions, ranging from U.S. stock indexes to inflation, the experts were all wrong.

Here’s why it matters.

The experts, those with schooling, experience and credibility share their financial predictions for the future. Next, regular folks go on to make economic, investing and financial decisions based on these predictions. Yet, what happens when most, if not all of the predictions don’t materialize?

Expert Economic Predictions for 2017

Stock market performance will be tepid.

According to Birinyl Associate, Wall Street strategists expected the S&P 500 to close out 2017 at 2,362, up 5.5%. Although it’s only mid-year, stocks rallied with their best performance since 2013, set 24 new closing records and is up 8.2%.

WalletHub.com joined in the stock market prediction game with a year-end S&P 500 prediction of 2,288 or a 2017 gain of 0.75%. On July 21^st, the S&P 500 closed at 2,472, approximately 200 points above the prediction.

Finally, a litany of financial experts was cited on zerohedge.com that we’re due for a major stock market collapse this year. In fact, economist Andrew Smithers claims that U.S. stocks are 80% overvalued, in line with the horrendous market crashes following 1929 and 1999.

10 Year Treasury bond yields will trend upwards.

Given the Fed’s expected rate tightening along with Trump’s initiatives, investors, myself included, were confident that the 10-year treasury yield would trend higher. I’m still perplexed that after hitting a high of 2.63% on March 16, 2017, the July 21^st yield has dropped to 2.15% according to macrotrends.net. Compare that with 2007 to 2016 average of 4.58%.