Daily Investment News Update

Bob Doll: 2010 Predictions
By: Patti Domm CNBC Executive Editor
Blackrock Vice Chairman Bob Doll says 2010 will be positive for stocks but there could be bumps along the way.Asked by CNBC if a 10 percent correction is possible, he said, "Yes I'd be surprised if we didn't see a 10."Doll said the market could be due for a correction steeper than the shallow selloffs seen since the market's rally began in March.He also said it may be that there are some bumps in the first half of the year in contrast to the popular expectation that the market sees smooth sailing early in the year but struggles later in the year. "It may be that it's more even," he said.

Blackrock's Bob Doll predictions for 2010:
* S&P 500 probable level of 1250
* Sees emerging markets outperform developed markets
* Sees U.S. outperforming other developed markets
* Sees possible earnings growth of 20% Plus
* U.S. economy grows at an above trend 3%
* Job growth turns positive early in the year but unemployment remains high
* Sees inflation as a non-issue
* Expects rates to rise at all points on Treasury curve including Fed funds
* Stocks outperform cash and treasuries
* Likes health care, tech and telecom — Underweights financials utilities and materials
* Merger activity picks up due to strong cash flow and slow growth
* GOP makes gains in House and Senate but Democrats continue to control Congress

http://www.cnbc.com/id/34726574

If Fed Missed This Bubble, Will It See a New One?
By: David Leonhardt The New York Times
If only we’d had more power, we could have kept the financial crisis from getting so bad.That has been the position of Ben Bernanke, the Federal Reserve chairman, and other regulators. It explains why Mr. Bernanke and the Obama administration are pushing Congress to give the Fed more authority over financial firms.So let’s consider what an empowered Fed might have done during the housing bubble, based on the words of the people who were running it.In 2004, Alan Greenspan, then the chairman, said the rise in home values was “not enough in our judgment to raise major concerns.” In 2005, Mr. Bernanke — then a Bush administration official — said a housing bubble was “a pretty unlikely possibility.” As late as May 2007, he said that Fed officials “do not expect significant spillovers from the subprime market to the rest of the economy.”

http://www.cnbc.com/id/34725632

Dorn: Gold And The Dollar
By: Janice Dorn
The Trading Doctor
Since December 22nd, GLD has been bouncing back from a steep and swift sell-off from its early December peak. The question is, can it recover or will it fail to make new highs in 2010?My colleague Tony Cherniawski and I did a simple Elliott Wave analysis with the following outcome:
Let’s review what has happened in 2009 for starters.
The Elliott Wave Pattern shown in the chart and the cycles patterns seem to agree that GLD hit an important high in early December. Although January can be a very good month for the price of gold, it is possible the November has stolen its thunder in a blow-off top. A clearly impulsive pattern through December 3rd is displayed, suggesting at the minimum that a further downside correction is probable.

http://www.cnbc.com/id/34726312

Markets 'Still In a Lot of Trouble': Peter Costa
By: JeeYeon Park CNBC News Associate
Markets opened flat on Wednesday, after a pair of private employment readings in anticipation of Friday's U.S. government jobs report. What should investors expect from the markets this month? Peter Costa, president of Empire Executions and CNBC market analyst, shared his insight.“Short term, we wait on data everyday—we’re waiting on Friday’s non-farm payroll numbers,” Costa told CNBC.

http://www.cnbc.com/id/34725442

Bank of America’s Bartels Says S&P 500 to Rally on ‘Breakout’
(Bloomberg) -- The Standard & Poor’s 500 Index will gain 8 percent after it jumped to a 15-month high, said Mary Ann Bartels, a Bank of America Corp. technical analyst.
Bartels, who predicted in October that U.S. stocks would plunge, said that call was “premature” and she now expects equity markets to add to the biggest yearly rally since 2003.“In the near term more gains are likely,” Bartels wrote in a note to clients yesterday.The advance in the first two days of this year lifted the S&P 500 out of a 3 percent range where trading was confined for most of November and December. The “breakout,” with more stocks rising than falling, suggests the index will climb to as much as 1,230, Bartels said. The S&P yesterday advanced 0.3 percent to 1,136.52, the highest level since October 2008.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agG4iLU4yzic

Expect Double Dip in Second Quarter: Economist
By: Robin Knight CNBC Assistant Web Producer
The U.S. economy will slip back into recession in the second and third quarter of 2010 as the boost from fiscal stimulus measures and inventory rebuilding wears off, James Shugg, senior economist at Westpac Bank, told CNBC Wednesday."In the second half of this year, starting in the second quarter, a bit of a mismatch is going to take place," Shugg said."You'll see the boost to growth from fiscal stimulus and inventory rebuilding lose momentum and what's left? A consumer that's still inclined to save more than spend, a banking system still dragged down by one in four mortgages being in default," he said.

http://www.cnbc.com/id/34723122

Expect a 10% Correction in the Near-Term: Chief Investor
By: JeeYeon Park CNBC News Associate
We are cautious on the markets in the near-term, but bullish in the long run, agreed James Shelton, chief investment officer of Kanaly Trust and Bill Spiropoulos, chief executive of CoreState Capital Advisors. They discussed their 2010 market projections. “You have to realize that the market doesn’t go straight up all the time,” Spiropoulos told CNBC. “So it wouldn’t surprise me to see a minor 5 to 7 percent pullback [in the short-term]. I think it will be contained to less than 10 percent in the U.S. and 20 percent in international markets.”

http://www.cnbc.com/id/34727370

Fed Likely Won't Raise Rates Until Next Year: Gross
By: CNBC.com
The Federal Reserve likely won't raise short-term interest until 2011 because economic growth and inflation remain weak, Pimco's Bill Gross told CNBC.“The output gap and the core inflation rate is probably heading downward for the next 12 to 24 months," said Gross, the co-chief investment officer and founder of the world's biggest bond fund. "If that’s the case and if unemployment stays close to 10 percent, then there’s no reason for the Fed to begin to raise interest rates." However, the central bank's decision to begin removing some of its stimulus spending from the financial system this year could push the yield on 10-year Treasurys up 0.30 to 0.40 of a percentage point, Gross said.

http://www.cnbc.com/id/34731743

BlackRock’s Doll Favors Emerging Economies, Equities
(Bloomberg) -- Emerging-market stocks and economies will outperform the developed world this year, according to Bob Doll, vice chairman and chief investment officer for global equities at BlackRock Inc., the world’s biggest asset manager. Developing economies will grow 5.2 percent in 2010 as industrialized nations expand 2.3 percent, Doll said. Inflation will be a “non-issue” in the U.S., Europe and Japan this year, and American stocks will outperform cash, Treasuries and most other developed markets, Doll said.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alubg_1gux6o