4
raised interest rates six times.
11. In October , consumer confidence fell sharply to its lowest levels in a year. The
Conference Board reports that this index stood at 135.2 in October, a steep drop from the
142.5 index of September.
12. The price of energy has almost tripled during the course of the year.
13. There is an increasing trend of dot com companies failing.
14. The Bond market suffered its worst year ever.
The forecast will be presented differently. The summary of the forecast will be presented first.
Following that, the rational for each section of the forecast will be presented. This change is
based upon feedback from our many readers.
FORECAST SUMMARY
Stock Market:
The market will probably have volatile but upward growth starting in the
2
nd
Quarter. The market could hit a low of 9,000 in the Dow Jones
Industrial Average but it is forecast to hit 11,250 by the end of the year
. Due to pronounced demographic shifts, the market could reach 20,000
by 2008. The NASDAQ will finish the year at 3,200 but it will be a volatile
year.
LEI
The LEI (leading economic indicators fell 0.2% in November after falling
0.2% in October. This index has fallen in 8 out of the last 10 months.
After posting a 1.5% - 2.0% gain in each of the last 3 years. It is forecast
that the LEI will fall for the next 2 months and then rise slowly throughout
the remainder of the year.
Unemployment:
New York City 8.1 %, Long Island 4.2%
Inflation:
Given the slowing down of the economy, low current inflation, increased
interest rates by the FED and the Asian problem look for inflation to be
in the range of 1.25% to 2.1 % for the year.
