What’s Your Year End Dow And Second Half Real GDP Forecast?
Dow 8500, GDP: .5%
Former Labor Secretary
Professor of Public Policy, UC Berkeley
We’re seeing a little bit of a rally based mostly on hope rather than economic fundamentals. GDP will grow a bit largely because inventories have to be replaced and consumers have to replace durables. But none of this is anything to write home about.
Dow 9,000, GDP: 1%
The New Republic
We’re basically going to be sideways the rest of the year. I think real GDP growth will be about 1 percent in the second half (1.5 percent in Q3, then back to .5 percent in the fourth quarter, as 10 percent unemployment crimps spending and state budget cuts take their toll). I’d guess the Dow will be right at 9,000. I suspect it’ll keep rising for the next few months, but at some point we’ll have a mini-panic in the financial sector as commercial real estate losses pile up and residential foreclosures spike up again, which will temporarily drive it back under 9,000.