The Dow Jones industrial average, which closed at 5381.21 on Jan. 30, will peak in the spring at 5800 and then fall to 4500 in 1996, predicts Byron R. Wein, U.S. investment strategist at Morgan Stanley & Co., New York.
In a report to clients, Mr. Wein also said the yield on long-term Treasury bonds, recently about 6.1%, will rise above 7%.
Among other surprises for the year, he predicts:
China will reveal it wants to bring Taiwan under Beijing's control before the end of the 1990s, destabilizing southeast Asian markets.
Boris Yeltsin will be forced from office, and anarchy will overcome the frail political order in Russia.
Mexico will revive and its stocks again will become favorites of emerging market investors.