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Six reasons why 2014 is the year the economy clicks

Stocks rally on!

Stocks will rally in the coming year, but expect some major volatility. Lots of folks disagree, but I think that the 10-year Treasury yield will not be easily tamed, and it will rise above 3.5 percent as the Fed removes some stimulus. I think 4 percent could be on the horizon. That will make stocks skittish but if the economy is improving, as we hope, the bumps will give way to year-end gains. They won't be the dazzling gains of 2013, but maybe the S&P 500 will eke out a high-single-digit move.

A trader works the floor of the NYSE.
Getty Images
A trader works the floor of the NYSE.

Zero forever?

The Fed's efforts to assure markets it will keep short-end rates at zero for a long time actually works. The yield curve steepens, and by year-end, if everything is clicking, the market starts to look for a rate hike in 2015.

(Read more: Wall Street: The day of reckoning nears)

Half full!

Ok, this has GOT to be the year. Let's hope we see growth accelerate because if it doesn't, I fear a dip. By the end of the year, we should see some heartier gains and an economy growing at 3 percent plus.

China to the rescue?

The odds are 50-50 that China restarts its growth engine in a meaningful way and boosts the world and regional economy. The new leadership needs to show it is making economic strides, as it flexes its military muscle in the region, and that could be motivation to get the economy humming.

(Read more: 3 big hedge fund predictions for 2014)

Energized economy

The U.S. oil and gas boom is in full swing, and it will continue to affect energy producers around the world. OPEC, with more barrels of its own coming on line, struggles to keep control of prices. Here's a wild thought: the U.S. actually starts to embrace its rising position of power and the political implications of being less dependent on other sources. The Keystone pipeline gets approved, and WTI crude stays in a range under $110 per barrel.

A look back at 2013

Hey I got an A! Last year I said stocks would hit new highs, Washington could be a bigger source of angst than Europe,and the economy would be seen as 'half full.' All three could still be true for 2014!

—By CNBC's Patti Domm. Follow her on Twitter @pattidomm.