From the Wall Street Journal:
The stock and bond markets moved higher during a rocky 2007. But things are off to a tough start so far in 2008, amid growing indications of an economic downturn.
The Dow Jones Industrial Average is down 5% so far this year and the Nasdaq Composite Index is down 8%, after losses last week of 1.5% and 2.6%, respectively.
Most strategists predict the stock market will have problems in the first half of the year, as housing troubles and slowing consumer spending weigh on corporate profits. Things could improve later in 2008, thanks to expected interest-rate cuts by the Federal Reserve. Most experts anticipate a strong year for foreign stocks, as growth abroad powers ahead.
A year ago, when we speculated on developments that could take the market by surprise in 2007, our story accurately anticipated deep troubles in the subprime mortgage business and robust foreign growth, though it incorrectly anticipated a spate of energy acquisitions and higher price-earnings ratios.
What might catch investors by surprise this year? Below are some unorthodox predictions:
Dollar Rebound...MOREUPDATE:Where Market Surprises Lurk in 2008", Fund My Mutual Fund had an interesting post "13 Outlier 2008 Predictions":