Patti Domm: Markets
1. Equities gain but stock-picking rules.
With the Fed on hold, and the economy chugging along at slow speed, stocks can still go higher. Strategists see just marginal gains in 2012. It should prove better to be a stock-picker than to just rely on those returns from sectors and indices.
2. The economy looks decidedly half full.
Half-full, please! The growth forecasts for the first half of 2012 are soft, to say the least. The fourth quarter of 2011 might look better than the rest of the year, but it is by no means going to fire up activity and sentiment enough to boost the first half economy much more than the low single-digit growth economists are expecting.
3. Washington and Europe dominate the markets.
Fear factors 1 and 2: last year I said to watch out for Europe. Well, the markets have also found much to fear from dysfunctional behavior in Washington. The debt ceiling drama and not -so-super super committee performance are probably illustrative of the typical behavior of the 2012 election year, a time when politicians might normally put their aspirations ahead of the good of the Republic. Let's hope I'm wrong.
4. The grassroots revolt spreads.
Occupy Wall Streetis still young and disorganized, but if Washington doesn't step up and stop the partisan feuding, there will be a whole lot more angry people — even among the one percent.
5. Beijing could be a game changer.
China's economy is the wild card, and so is the issue of how much influence it wants to wield in the global economy. If China shows up as a player in Europe, it could quickly change the outlook there. If China lets its currency become more free floating, it can change the world trade picture.
Results for 2011
My grade for 2011: B
1. We will start seeing the economy as "half full."
1. I was right for a little while, but I didn't realize how fleeting that feleing would be and how quickly we could turn back to the double-dip mentality. I didn't foresee the Japanese earthquake, but I also missed Washington's ability to harpoon sentiment and the economy.
2. Sovereign debt will be one of the bad things.
Yes it was and will continue to be in 2012 and beyond.
3. Stocks can keep rising in 2011, but it's no moon shot.
I was optimistic; I still am. The year's not over yet.
4. The dollar doesn't look so sad.
Dollar better? No way. I was too hopeful on the economy and that the Fed would stop keeping the recovery in its intensive care unit.
5. Global tensions and terrorism stay in the headlines.
Of course they did. I didn't predict the Arab spring or the death of Osama Bin Laden, but I did worry about more tensions around Iran, which continue.