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Miami Herald
an hour ago
- Miami Herald
Legendary Wall Street forecaster Bob Doll is having his best year
Stock market prognosticators are wrong so frequently that observers can rightly wonder if they're making forecasts using the oldest soothsaying methods, drawing pebbles from a pile, dropping hot wax into water, using random dots on paper or, of course, trying to find something magical in numbers. Yet at the start of every year – and again at the midpoint – countless market watchers take their crack at divining the future, mixing educated conjecture, informed hunches and the occasional WAG (wild-ass guess). Related: Veteran analyst drops updated stock market forecast Measured just about any way possible, most of those projections are wrong. CXO Advisory Group analyzed more than 6,500 forecasts-using methodologies ranging from fundamental to technical analysis-made by 68 experts on the U.S. stock market from 2005 through 2012. The investigation found that the accuracy of the forecasts was below 47% on average. That loses to a coin flip. Bloomberg/Getty Images Bad calls tend to be forgotten quickly, as soon as a forecast is updated based on new information. Winning picks are lionized and celebrated, even though the expert may have less staying power than a bull market rally. Wall Streeters sometimes call the tendency to place too much trust in a guru who made the most recent good call the "Elaine Garzarelli Effect." Garzarelli made her reputation as a Lehman Brothers investment strategist by urging clients to get out of the stock market the week before the Black Monday crash in 1987. That call made her one of the most widely quoted strategists on the Street, but it was also the pinnacle of her success. Whether it was brilliant prescience or dumb luck may be argued forever, but she never really duplicated that success. Garzarelli failed to generate much interest when she tried running mutual funds and a call on stocks being 25% undervalued late in 2007 as the global financial crisis was looming, further dimmed her star. While old-timers remember her name – she runs Garzarelli Research and her newsletter suggests that she is currently bullish on small- and mid-caps plus transportation stocks – she is like many one-time stars, known more for one right call than for being right consistently over years or decades. One Wall Street analyst who hasn't shied away from forecasts -- and has a stellar track record -- is Bob Doll, chief executive and investment officer at Crossmark Global Investors. In a 40-plus-year career, Doll has also been the top equity strategist at Blackrock, Nuveen, Merrill Lynch, and Oppenheimer Funds; at each of those stops, Doll-a regular guest on CNBC, Fox Business, and seemingly all financial media outlets-has started each year with 10 forecasts for the coming 12 months. Related: Top analyst sends message on pending ugly earnings miss (plus one big beat) Doll holds his picks up to a grader each year and historically has been right 72% of the time. That's roughly where he stood with his 2024 prognostications. He has said that his best years ever put him at just above 80%. Entering 2025, Doll was expecting "fewer tailwinds, but more tail risks." His picks reflected that, calling for "some bumps in the road, but some good news and probably more volatility," in an interview on Money Life with Chuck Jaffe that aired in January. Now, seven months later, Doll is getting the results he expected. Eight of Doll's 10 picks tend to be tied to the economy and stock market, with one tied to politics and a wildcard. This is what Doll was calling for entering 2025, and how it's turning out: Slower economic growth as unemployment rises past 4.5%. The jury is out on this one, but if unemployment hits Doll's target – it's currently just north of 4% -- mark this as a inflation that stays above Fed's 2% target, causing the central bank to cut rates less than expected. Barring a Fed surprise, this one's on track.10-year Treasury yields primarily between 4% and 5% with wider credit spreads. The 10-year Treasury has spent the year in that range; credit spreads were up around the tariff tantrum but have narrowed since. But if there's an economic slowdown, they will widen and this one will be a fail to achieve the market's consensus 14% expectation entering the year, and yet every sector has up earnings. This forecast is virtually a lock at this point, even with Doll expecting a second-half slowdown that could hurt some volatility rises, with the VIX average approaching 20. The VIX averaged 18.5 in the first quarter and 24.4 in the second, so this call –and the VIX has only been this high in two of the last 13 calendar years – might have seemed like a longshot but now looks like a sure experience a 10% correction and price/earnings ratios contract. The correction went on the books in April, and P/E ratios are down and appear likely to stay that way. This can be marked in the win portfolios beat cap-weighted portfolios and value beats growth. Both of these conditions are true at the moment; the question is whether that will hold up through energy and consumer staples outperform healthcare, technology and industrials. This looked like a sure thing into June, when the margin of outperformance shrank. If financials weaken, it could put this one in jeopardy; barring that, it looks like another win."Congress passes the Trump tax cut extension, reduces regulation, but tariffs and deportation are less than expected." The tariff forecast here is the one thing where Doll looks like he's wrong and won't recover; by year's end, this one is likely to look half-right, making it the one clear blemish that's efforts make progress but fall far short of $2 trillion in annualized savings. Even Doll acknowledges that this was a softball. In a July 22 interview on Money Life with Chuck Jaffe, Doll acknowledged that he now expects to be right at least 70 percent of the time, "but I wish coming into the year we knew which seven we were going to get right. We could make a lot of money. The problem is you don't know which ones you're going to get right and wrong." As for the rest of 2025, Doll gave three quick assessments for where things stand now: "One, the economy is slowing. We just don't know how much it's going to slow. Two, we're beginning to see tariffs show up in the inflation numbers. We don't know how much. And number three we have this tailwind called [artificial intelligence] which is real and is keeping things moving." Further, Doll said he expects the AI play to broaden out. The tailwind called AI has also been particularly strong at the high end of the market. We all were expecting some measure of breadth this year. Are we going to see the breadth show up at some point? Yeah. Well, it obviously occurred in the first quarter, and then it went away in the second quarter. While Doll noted that tariffs seem to be showing up in slight increases in the Consumer Price Index, or CPI, he did not think they would cause a spike in inflation over the rest of the year. "I don't think [the impact of tariffs on inflation] it's going to be horrible," he said. "It's just going to be there. Remember, only 15% approximately of our GDP is from outside the United States. The other 85 is pretty domestic. So it's limited by how much of the economy it really affects. "Now, having said that, remember the Fed saying 'We've got to get inflation down to 2% and they're struggling at 3% and we're not going to get to 2%. And that means all these people who want the Fed to lower rates are going to have to wait a little bit longer." Related: Top analysts say investors are suckers for bad dividend stocks The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
American Press
an hour ago
- American Press
Louisiana spotlight: Nungesser keeping state top of mind for those ready to explore
Traveling has been significantly increasing since the decline during the COVID-19 pandemic — and Lt. Gov. Billy Nungesser and his team are working hard to keep Louisiana top of mind for those ready to explore. Last year, Nungesser said his office used a U.S. Commerce Department grant to increase awareness of Louisiana as a travel destination in Mumbai and New Delhi, India; Madrid, Spain; and Milan, Italy. In a few months, the team will spend a week in Canada promoting the Bayou State and its French heritage. Canada 'is about 33 percent of our international market,' Nungesser told members of the Rotary Club of Lake Charles Wednesday afternoon. 'Those Canadians love them some Louisiana.' In Paris, the Louisiana Office of Tourism also wrapped taxi cabs serving as rolling billboards to inspire travel to the state and it sponsored the London Jazz Festival last year. Nungesser said Louisiana welcomed 43 million domestic and international visitors in 2023, the most recent data available. Those visitors spent a total of $18.1 billion, an increase of 5.4 percent over 2022. International visitation showed the most significant gain, he said, increasing 16.9 percent in 2023 with spending reaching $1.7 billion. Louisiana has also been on the national stage in recent months with an alligator-themed float that crawled the streets of Pasadena, Calif., for the 136th annual Rose Parade and again as host to the Super Bowl at the Superdome in New Orleans. 'Somebody asked me what do we do better than anyone else and I said Mardi Gras,' Nungesser said. 'So we found out what parades we could go to. We were in the Macy's Thanksgiving Day Parade for three years and now we're in the Rose Parade.' Though the floats are professionally designed, they are decorated by volunteers days before the parade. Every float is covered in flowers, leaves, seeds, bark and other natural materials to honor the Rose Parade's history. Nungesser said volunteers from Louisiana are flown to California and are shuttled between the warehouse where the float is being built to their accommodations. A New Orleans native who now resides in California brings her beignets-only food truck each day to feed the volunteers during their shifts and the best of Louisiana cuisine is served each night. 'It's a trip everybody should make,' he said. For more on volunteering, visit Nungesser said participation in the parade 'allows us to drive awareness about our state as a vacation destination to a broad number of attendees, as well as viewers watching from home,' Nungesser said. 'The return on investment for the Rose Parade has been incredible.' Nungesser said the Rose Parade media coverage — thanks to a plethora of morning show interviews aired across the nation as the float is being built — for the past four years reached an estimated 10.4 billion people and was worth $144.9 million. State Parks When Nungesser took office nearly a decade ago, seven state parks were under the threat of closure. 'I was told, 'You don't have the money to keep them open and they're in pretty bad shape,' ' he said. 'Thanks to our sheriffs and local volunteers we were able to do a lot of repair and get them presentable and today those seven parks are making a profit.' The Louisiana Office of State Parks operates 21 state parks, 14 historic sites and a preservation area that comprises 45,000 acres, 110 miles of roads and 1.2 million square feet of rental facilities that welcomed more than 1.75 million visitors last year. He said his new goal is creating resort conference centers within some of the state parks to attract visiting conferences. 'We have over 350 groups that meet every year all over Louisiana,' he said. 'They don't meet in New Orleans because the hotel does not cover their per diem, but they meet everywhere else. There's usually 300-500 people and it's a great opportunity for us and it would be a great for the local economies. One thing we won't do is we won't let anyone open a restaurant (within the conference centers) or anything that would compete with local businesses.' One state park thriving at the moment is Bogue Chitto — a top destination for travelers nationwide for its mountain biking trails, which are maintained by the North Shore Off-Road Bicycling Association. 'A thousand people a month from 10-15 states go to Washington Parish for this mountain bike trail,' he said. 'We also have horseback riding. We brought a gentleman's horses into the park and let him run the business out of the park and he's knocking it out of the park, no pun intended. These two private-public partnerships have put Washington Parish on the map. Before they had very little tourism. It has changed that town forever.' Prime Video just completed a documentary on the mountain bike trails and 25 percent of the proceeds will go into building additional trails. He said the park recently acquired an additional 600 acres to expand the mountain bike and horseback riding trails. Museums Nungesser's office oversees nine museums; the Secretary of State's office and some local cities operate the rest. He said he hopes to introduce a bill next year that would force all museums to be open on the weekends — every museum operated under the Secretary of State's Office are not — when people are off work and more likely to visit. His office has also bought the website and plans to video every museum in the state. 'We did a video about the ghost that's upstairs at the Beauregard Gothic Jail — I don't know if it's there but the lady has me convinced and I'm not going up to check — and we test marketed to people who like ghosts and at Halloween, 4,000 people showed up to find that ghost,' he said. 'If you have a ghost, we will promote it and they will come.' He said most are aware of the World War II Museum in New Orleans. Now promotions will tie in Chennault Aviation and Military Museum in Monroe, the Louisiana Military Museum in Abbeville and others to draw in like-minded visitors. He also wants to give all museums the freedom to hire the directors of their choice. Right now, that responsibility falls under the office that oversees the facility. Louisiana seafood Several key pieces of legislation passed during the 2024 Regular Legislative Session affected the seafood industry in the state. Act 47 mandates restaurants serving imported crawfish or shrimp must officially inform their customers on the menu; Act 148 requires restaurants and food service establishments to label on menus all imported seafood as such, not just shrimp and crawfish; and Act 756 transferred the Seafood Safety Task Force to the Louisiana Seafood Promotion & Marketing Board to help in the regulation of imported seafood. 'We want people to ask before they eat. The goal is to prevent imported seafood — which is filled with a lot of antibiotics — to come into this country and to level the playing field for our Louisiana fishermen,' he said. 'If you eat Boudreaux's crawfish tails, they're going to be from Boudreaux's. They're not going to be from Thailand.' Keep Louisiana Beautiful Love the Boot Week is Louisiana's largest litter removal and beautification effort. During 2024, 19,441 people volunteered a total of 100,712 hours at over 760 events, removing a record 347 tons of litter in all 64 parishes. 'It has become a movement,' Nungesser said. Their efforts diverted 293 pounds of aluminum cans and 330 pounds of plastic bottles from the landfill allowing the items to be recycled. Next month, the office will be handing out buckets at marinas around the state, asking boaters and fishermen to scoop up any trash they may see on the waterways and shorelines. 'We're not going to take our foot off the gas until we have no more trash in Louisiana,' Nungesser said.
Bloomberg
4 hours ago
- Bloomberg
EM Debt Hedge Funds Eye Safeguards as World-Beating Rally Blooms
Hedge funds dedicated to emerging-market debt are increasingly turning to risk-mitigating strategies to ensure they lock in double digit gains as a broad rally in developing nation assets deepens. After a banner first half of the year, hedge funds targeting EM debt have returned nearly 13% on an annual basis — more than their peers positioned in any other asset class, according to data based on Bloomberg indexes.
