This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Bold Stock Market Predictions for the Rest of 2012

Stocks in this article: DIS SIX FUN USB HBAN RF

By David Sterman

NEW YORK ( StreetAuthority) -- At the start of 2012, investors were assessing whether it was wiser to focus on the deep value that many stocks offered, or the incipient signs of a global economic slowdown that would cap any upside for stocks.

They focused on the former in the first quarter, giving stocks a solid boost. But it was the economic headwinds that dominated investor sentiment during the second quarter.

For the rest of the year, you can expect more of the same.

The market is likely to focus on still-cheap valuations whenever the global news flow quiets down. Investors will likely shun stocks when the economic seas get rough.

Still, it's been an uneventful six months -- at least in terms of unexpected events. Europe remains a mess (what else is new), U.S. corporate profits remain quite robust (no surprise there) and the economy is still in growth mode (though hardly robust).

Perhaps the next six months will bring a change and the market will respond to new catalysts.

Here are five events that could shape the market's direction well into 2013...

1. Iran blinks and oil hits new lows

The Iranian government is in saber-rattling mode again, test-firing a missile to snub any perception of weakness when it comes to negotiating nuclear restrictions. I think it's a bluff, so the recent move back up toward $90 crude oil is a head-fake.

Recent reports about Iran imply that economic sanctions have really taken a toll. Inflation is surging and domestic economic activity is shrinking. Another round of sanctions, this time focused on a global boycott of Iranian oil that took root on July 1, promises to deepen the economic distress.

That's why Iranian leaders will have to shift course -- sooner rather than later -- and agree to severe restrictions on their nuclear development program.

If and when that happens, then look for oil prices to resume their downward slide. Demand for oil remains weak, and here in the United States rising production is starting to take a meaningful bite out of oil imports. This could set the stage for a drop in West Texas Intermediate Crude to $70 or even $60.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs