32 Reasons Stocks Will Jump This Year

This column was originally published on Street Insight on Jan. 30 at 8:40 a.m. ET. It's being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

Last year around this time, I speculated on the 20 reasons U.S. stocks would rise a total of 15% for the year. This year, I have 32 reasons for a 17% total return in the S&P 500 for the year. I believe:

1. U.S. GDP growth will average 3.0% this year. My reasons: Housing- and auto-related weakness will subside, and the GDP deflator will subtract less from nominal growth as inflation continues to decelerate.

2. Americans' median household net worth will hit another all-time high. This will be due to home values remaining near record highs after a historic run-up, stock portfolios continuing to rise, wages continuing to outpace inflation and unemployment remaining low.

3. Consumer spending will accelerate back to above-average rates. The catalysts include more seasonally appropriate weather, a healthy job market, wages substantially outpacing inflation, rising stocks, a stabilizing housing market, pent-up demand, lower energy prices and rising confidence.

4. Housing sales are likely to improve modestly. This will lead to a dramatic decline in home inventories as new construction remains muted throughout the year. The average home price is likely to trend slightly lower through the first two quarters of the year, before a modest uptick into year-end leaves prices about even.

5. The unemployment rate will average 4.5% throughout the year. It has averaged a very low 4.6% over the last 12 months and has been lower than that during only two other periods since the mid-1950s. More technology, health care and financial jobs will help offset real estate-related job losses.