Stocks should follow the economy higher in the second half of 2014 as housing bounces back from a brutal winter and job growth jumps, says Russell Price, Senior Economist at Ameriprise Financial. Price says the housing market has gone from overbuilt to under-built, even though the difficulty in getting a mortgage remains a headwind. He says labor slack has been removed from the market which means that not only jobs are going to be added in the second half, but we should see wage inflation and in turn higher interest rates as well. Put it all together and Price says investors should hang onto their stocks as a 3.5% GDP will lift corporate earnings and equity prices.
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