This year should shape up as a pretty good one for the economy and financial markets, with mild economic growth, low inflation and healthy earnings reports, according to an annual survey of 84 money managers by William M. Mercer Inc.
About two-thirds of the managers who participated in the The Mercer Fearless Forecast anticipate economic output, as measured by the gross domestic product, to increase between 2% and 2.9%. Inflation, as measured by the consumer price index, will range about the same. At the same time, about a third of the Fearless Forecasters expect the Dow Jones industrial average will range from 5400 to 5699, and the Standard & Poor's 500 Stock Index will climb 10% to 18%.
Just more than 40% expect interest rates on the benchmark 30-year Treasury bonds to yield 5.5% to 5.9%. About a third of the surveyed money managers expect international stocks will outperform domestic equities for the top spot in 1996.
It's worth noting, however, the managers were dead wrong in their predictions about the economy and the market for 1995.
The 88 money managers surveyed a year ago failed to anticipate the extent of the bull market, the drop in long-term interest rates, the low level of inflation and the healthy growth in the economy.
