Who got the economy and markets right in 2014? We introduce the economist, strategist and portfolio managers who hit home runs on WEALTHTRACK this year. Best Macro Call: Nancy Lazar, Head of Economic Research Team and Co-Founder, Cornerstone Macro. Her correct call: The U.S. would resume its position as the driver or world economic growth and that China’s economy and influence would slow. Best Market Call: Francois Trahan, Head of Investment Strategy Team and Co-Founder, Cornerstone Macro. His correct call: U.S. stock markets would continue to rally and the dollar would strengthen against other major currencies. Best contrarian Call: Robert Kessler, Founder and CEO, Kessler Investment Advisors. His correct call for every year of the past decade: U.S. Treasury bonds yields would stay near record lows and make money for investors. Best Surprise Call: Robert Amodeo, Head of Municipals, Western Asset Management and Robert DiMella, Co-Head of MacKay Municipal Managers Their correct call: The health of the municipal bond market was improving and it would be a top performing bond market.
CONSUELO MACK: This week on WEALTHTRACK, the best calls of 2014 from WEALTHTRACK all stars. Hear the winning plays from Nancy Lazar on the economy, Francois Trahan on the markets, Robert Kessler on treasuries and Rob Amodeo and Bob Dimella on Munis. Next on Consuelo Mack WEALTHTRACK.
Hello and welcome to this edition of WEALTHTRACK, I’m Consuelo Mack. What have been the signature economic and market developments of 2014? Who got it right among our WEALTHTRACK guests? The best macro call goes to Nancy Lazar of appropriately named, Cornerstone Macro, an independent research firm she co-founded in 2013. Lazar, a perennially top ranked economist predicted the U.S. would regain its position as the world’s dominant economic power and that the Chinese juggernaut would slow. Here’s what she told us earlier this year:
NANCY LAZAR: Well, the two big powers of the global economy have been the U.S. and China, and up until this year China had been that driver of global growth, but over the past several years China has built up a tremendous amount of excesses, investment credit, corruption, pollution but particularly the investment and the credit, and they are now at the very early stages of unwinding those bubbles, if I can call them that, and as a result growth must slow. The only way they can unwind those bubbles is for growth to slow, and there are plenty of signs indeed that is happening.
In contrast in the United States, we’ve dealt with a lot of our excesses, our credit bubble for example burst hard as we now know, in particular taking housing down, but today we have long-term drivers of growth in the United States, making it easier for a sustained period of growth. I’m not suggesting that U.S. GDP growth will be extremely robust, five or six percent. We’re using about three and a half percent GDP, but when you go through the math and you look at how much the U.S. is going to grow this year and how much China is going to grow this year, on balance, yes. The U.S. is going to grow faster than China in dollar amounts here in 2014…