Latest news with #forecasting
Yahoo
2 days ago
- Business
- Yahoo
Legendary Wall Street forecaster Bob Doll is having his best year
Legendary Wall Street forecaster Bob Doll is having his best year originally appeared on TheStreet. 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).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. From Black Monday star to today's afterthought 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. Bob Doll's forecast record beats coin flips, by a lot 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 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 win. Sticky 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 winner. Earnings 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 sectors. Equity 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 shot. Stocks 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 column. Equal-weighted 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 December. Financials, 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.' What Bob Doll think happens for the rest of 2025 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."Legendary Wall Street forecaster Bob Doll is having his best year first appeared on TheStreet on Jul 27, 2025 This story was originally reported by TheStreet on Jul 27, 2025, where it first appeared.
CNN
21-07-2025
- Climate
- CNN
Democratic Senator: Cost of expanding forecasting technology to detect extreme weather events is ‘worth it'
Democratic Senator Maria Cantwell of Washington told CNN's Pamela Brown that the US needs to upgrade its weather forecasting system, pointing to the tragedy in Texas earlier this month. "It's a very dangerous environment, so Americans should have the best weather system," Cantwell said.
CNN
21-07-2025
- Climate
- CNN
Democratic Senator: Cost of expanding forecasting technology to detect extreme weather events is ‘worth it'
Democratic Senator Maria Cantwell of Washington told CNN's Pamela Brown that the US needs to upgrade its weather forecasting system, pointing to the tragedy in Texas earlier this month. "It's a very dangerous environment, so Americans should have the best weather system," Cantwell said.
ABC News
20-07-2025
- Climate
- ABC News
Mansfield installs weather station to bypass unreliable BOM forecasts
A new weather station at Mansfield in north-east Victoria could close a critical forecasting gap, offering residents more accurate data for the first time. Mansfield Shire Council Mayor Steve Rabie, who has lived in the region since 1983, said the council-operated station would provide an invaluable service to the community. Mansfield's position in the foothills of the Victorian Alps and its proximity to the Great Dividing Range have made weather forecasting in the region a challenge. Residents have had to rely on data from the Bureau of Meteorology's (BOM) closest station at the Eildon Fire Tower, about 28 kilometres away and at a significantly different altitude, making weather reports notoriously unreliable. The gap was highlighted when a storm cell tore through the area in August last year, and the bureau had to rely on readings from the Eildon station and satellite imagery to confirm that the storm was, in fact, a tornado. "Having our own dedicated station means our farmers, event organisers, sporting clubs, and residents can access real-time data and forecasts that are truly local," Cr Rabie said. The new solar-powered station is equipped with sensors measuring wind direction and speed, rainfall, temperature, atmospheric pressure, humidity, and UV radiation. To make the data publicly accessible, Mansfield Shire Council launched a local weather webpage providing real-time conditions, daily summaries and historical data. It also offers eight-day forecasts, using an artificial intelligence system developed by meteorologist and TV weather presenter Jane Bunn. Ms Bunn said the system used information from a variety of sources to provide more accurate forecasts. "It's really important to make sure you are … not putting all your eggs in the one wet basket, so to speak," she said. "By using AI, it enables us to do that in a much better way. "Before … it took a long time to do, so much so that the forecasts, for example, that the bureau put out are already out of date before you receive them because it takes them so long to process that data. "What we can do with machine learning and AI is speed up that process really considerably." Mansfield Farmers' Market organiser Alli Walker welcomed the development. Mansfield farmer Tony Tehan pushed to get a station set up in town for years and reached out to both the council and the BOM about it. He said it had been very frustrating. "I got sick of getting forecasts from Eildon, which is 20 or 30 kilometres away from Mansfield," Mr Tehan said. He said more accurate weather data would help him plan when to spray crops and put down fertiliser. "If it's too hot or too cold the sprays do not operate efficiently," Mr Tehan said. "It's [also] good to know what the 24-hour rainfall is. It affects runoff into dams and all that sort of thing. Despite the BOM being unable to integrate third-party stations into its network, Cr Rabie said the new local service would complement the broader-scale work of the bureau. Mansfield is not the only regional community stepping up when official services fall short. Independent, smaller weather stations are becoming a viable option for regional councils, filling gaps the BOM is unable to reach. Last year, a resident in Gracetown, Western Australia, built a weather station to deliver more accurate reports tailored to the town. A BOM spokesperson said the bureau could not comment on third-party services, but worked with all levels of government to provide weather advice "in the lead-up to or during severe weather". "The bureau carefully considers the latest observations and model guidance to provide products and information that support the community to prepare and respond to hazardous weather events," the spokesperson said. "Communities are advised to stay up to date with the bureau's forecasts and warnings via our website and the BOM Weather app and to always follow the advice of emergency services."
Yahoo
19-07-2025
- Business
- Yahoo
I Asked ChatGPT What the Stock Market Will Look Like in 100 Days — Here's What It Said
Artificial intelligence (AI) has transformed everything from customer service to research, so naturally, investors are curious whether AI can crack the code on stock market predictions. With ChatGPT's vast knowledge base and analytical capabilities, GOBankingRates put it to the test by asking what the stock market might look like 100 days from now. Be Aware: Find Out: The results were both enlightening and sobering, offering a glimpse into both the potential and limitations of AI-powered market forecasting. ChatGPT's 100-Day Market Outlook When ChatGPT was asked to predict where the stock market would be in roughly 3 1/2 months, the AI chatbot provided a measured response that focused on trends rather than specific price targets. Here's what it predicted. Read Next: Overall Market Direction ChatGPT suggested the S&P 500 would likely continue its upward trajectory, potentially gaining 3% to 7% over the next 100 days, assuming no major economic disruptions. The AI cited historical patterns showing when markets tend to perform well. Technology Sector Leadership The chatbot predicted that technology stocks would continue to drive market gains, particularly companies involved in AI, cloud computing and semiconductor manufacturing. It specifically mentioned that AI-related stocks could see continued investor enthusiasm. Interest Rate Impact ChatGPT anticipated that Federal Reserve policy decisions would remain a key market driver, predicting two or three rate cuts in 2025 for a target rate of 3.5% to 4% by the end of the year. The AI suggested that any hints of dovish policy could boost growth stocks significantly. Volatility Expectations Rather than smooth sailing, ChatGPT warned of potential volatility windows, particularly around earnings seasons and economic data releases. It suggested that while the overall trend might be positive, investors should expect 5% to 10% pullbacks along the way. Sector-Specific Predictions ChatGPT broke down its outlook by major sectors as well. Technology: The AI expressed optimism about megacap tech stocks, particularly those with strong AI integration. It suggested companies like Microsoft (MSFT), Google (GOOGL) and Nvidia (NVDA) could continue outperforming. Healthcare: ChatGPT predicted steady but unspectacular performance for healthcare stocks, with potential upside from biotech companies developing innovative treatments. Energy: The chatbot suggested energy stocks might face headwinds due to renewable energy transitions and potential economic slowdowns affecting oil demand. Financials: Banking stocks received mixed predictions, with ChatGPT noting that interest rate cuts could hurt net interest margins but might also reduce loan loss provisions. The AI's Confidence Level Interestingly, ChatGPT was remarkably humble about its predictive abilities. The AI repeatedly emphasized that 'It's so far unable to accurately predict stock prices, much to traders' dismay' and stressed that its analysis was based on historical patterns and current trends rather than guaranteed outcomes. The chatbot provided several important caveats: Market predictions are inherently uncertain. Unexpected geopolitical events could dramatically alter outcomes. Individual stock performance can vary widely from sector trends. Past performance doesn't guarantee future results. Reality Check: Why AI Can't Replace Human Judgment While ChatGPT's analysis was thoughtful and well-reasoned, it highlighted a crucial limitation of AI-powered investing: Markets are driven by more than just data and historical patterns. Human emotions, unexpected news events and complex geopolitical situations can instantly invalidate even the most sophisticated AI predictions. The idea of using AI to predict stock markets is 'as fascinating as it is complex,' with significant benefits and limitations that investors need to understand before relying on AI-generated forecasts. What Investors Should Actually Do Rather than banking on ChatGPT's 100-day prediction (or any prediction, for that matter), consider these evidence-based investment strategies. Diversify your portfolio: Spread investments across different asset classes, sectors and geographic regions to reduce risk. Dollar-cost average: Invest fixed amounts regularly regardless of market conditions to smooth out volatility over time. Focus on fundamentals: Choose companies with strong balance sheets, growing revenues and competitive advantages rather than chasing hot trends. Maintain emergency funds: Keep three to six months' worth of expenses in cash before making aggressive investments. Think long term: Historical data shows that markets trend upward over decades, even if short-term movements are unpredictable. ChatGPT's 100-day market prediction was thoughtful and grounded in historical analysis, but it came with appropriate warnings about the limitations of market forecasting. The AI's measured optimism about continued market gains, technology sector leadership and gradual interest rate cuts reflects current market consensus rather than revolutionary insights. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 4 Affordable Car Brands You Won't Regret Buying in 2025 10 Used Cars That Will Last Longer Than an Average New Vehicle This article originally appeared on I Asked ChatGPT What the Stock Market Will Look Like in 100 Days — Here's What It Said Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
