An Update to Our 10 Predictions for 2011 (Doll)

July 12, 2011

5 minute read

10. The 2012 presidential campaign sees a plethora of Republican candidates while President Obama continues to move to the center.
President Obama has certainly continued to maintain a relatively centrist position as he attempts to work out various compromises with Congress. On the Republican side, the presidential race was slow to get started, but at last count there were eight declared candidates with a couple of more potential ones waiting in the wings.

Economic and market conditions have been uneven so far this year, but, on balance, have been positive. The US and global economies remain in a subpar growth cycle and currently appear to be within a slowdown phase within that cycle. Some of the reasons for the economic soft patch are temporary (the disruptions caused by the disasters in Japan, a spike in oil prices, bad weather) and we are expecting better economic conditions in the second half of 2011.

Markets have faced and continue to face a number of risks. The European sovereign debt crisis continues to cause concern, but as of now a temporary fix has been enacted. The debate over the US debt ceiling is also a source of consternation, but we are expecting a resolution to that issue as well. In any case, market fundamentals continue to remain sound, with revenues, earnings and free cash flow growth all showing signs of strength. For some time now, we have been arguing that the economy would “muddle through” while markets “grind higher.” That has been the case for the first half of the year, and we expect the second half to just as good, if not better.

About Bob Doll

Bob Doll is Chief Equity Strategist for Fundamental Equities at BlackRock^® a premier provider of global investment management, risk management and advisory services. Mr. Doll is also Lead Portfolio Manager of BlackRock's Large Cap Series Funds. Prior to joining the firm, Mr. Doll was President and Chief Investment Officer at Merrill Lynch Investment Managers.

Sources: BlackRock; Bank Credit Analyst. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of July 11, 2011, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. International investing involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.