Despite a few bumps along the road, 2013 was a good year for economies around the world, as stock markets performed better than they had in nearly a decade. But what does 2014 have in store for us? Following, we would like to present you with a list we have compiled of the top 4 predictions for the stock market in 2014. The following predictions cover some of the main economies in the world, from the UK and the US to Japan and South European countries. Keep in mind that they do not represent, under any means, a certainty, but merely predictions about how stock markets and economies will perform throughout 2014.
Curious to see how things will unfold in the months to come? Let’s take a look at the countdown.
No. 4: Economic conditions will vary in the Euro zone
According to Reuters, the Euro zone will have a different evolution throughout 2014. In the United Kingdom, the pound is expected to continue its strengthening, which might have an undesired effect – an imbalance of the British economy that will produce the largest trade deficit relative to the gross domestic product in the world. Throughout other areas of the Euro zone, stock market conditions will remain week at least till the beginning of the third quarter. The Euro is expected to weaken, which might prompt southern European economies to start their recovery, but not until the end of the year.
No. 3: Japan will continue to disappoint
Once again, there is not much indication that Japan will finally live up to its expectations in 2014. Despite previous optimism, there are not many chances for a growth of the stock market. As a new consumption tax is set to be enacted in April, a fiscal tightening is most likely to ensue. This will probably lead to an abrupt fall of the stock market and a consequent recession by the second quarter.
No. 2: The US economic growth might be higher than anticipated
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While initially the International Monetary Fund projected a 2 to 3% economic growth for the US, Wall Street experts believe that this growth will be slightly higher – ranging in the 4%. The reasoning behind this prediction? According to the latest quarter of 2013, both the public and private sectors were already growing by over 4%. Considering that the country has surpassed its budget battles and that short term interest rates are down to 0%, there really is no reason why we should expect any slowdowns in economic growth.
No. 1: Some of 2013’s trends will continue in the following months
Even though major gains like we have seen throughout 2013 are not that likely to repeat themselves this year, there is much optimism that some trends from the past year will go on. Equity prices should be on the rise, at least in most corners of the world and bond prices are expected to continue to decrease.
