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Wednesday, April 7, 2010 as of 11:14 AM ET

The Casone Exchange
  • March 8, 2011 07:12 PM UTC by Cheryl Casone

    Best Guess: Volatility

    As I look back on the best guesses from the last few weeks and share them here with you, it reminds me how quickly things can change. For instance, Jordan Kimmel was looking (and technically still is) for the S & P to pull in 10 to 13 percent return this year. However, with crude spiking and the Middle East still imploding, any good analyst, and I’m sure Jordan now, would tell you sometimes all you can do is guess. That’s why we call this the Best Guess segment, because so many things that affect the markets are out of ours, yours, and anyone’s control. Listen to analysts and experts, read the financials periodicals, but at the end of the day, your portfolio is going to best be served by “your” Best Guess. At least you’ll know at the end of 2011, whether you got 2 percent or 20, that you did what your gut told you to do.


    My best guess is that US Equities (S&P500) will finish the 2011 year +10-13% total return, after being up more than that and being down about 10% at various points during the year.


    Small and mid-cap stocks will gain more momentum in 2011

    Oil will be below 90 dollar by the end of the year.

    There is a real possibility that the present rulers in Bahrain will be overthrown and replaced by a new order aligned with Iran. While the unrest in Libya is important Bahrain is the linchpin of stability in the Gulf and host to the US 5th Fleet. It’s my belief that the unrest in Bahrain may be of far greater importance to the strategic balance in the Middle East and to the oil market – we have a lot more to be worried about.

    Qaddaffi loses power by the weekend. He’s already lost Eastern Libya. His son tries to take over, but military officials that have already defected take charge. Now Egypt and Libya will be military ruled.

    With the stage set for QE2 to expire in June and U.S. companies starting to feel the heat from high commodity pricing the 2nd half of 2011 will be far more tumultuous than the first half.

    If the Middle East continues to see major protests and instability it will keep oil prices high, cut corporate profits, increase inflationary pressures and rising energy and food costs will be passed on to American consumers.

    Congress will introduce new legislation for domestic drilling that will help to fast track any and all permits for Gulf, Pacific, and Atlantic platforms. They’ll even give bi-partisan support to tax breaks for oil companies! (then hell freezes over…..)

    The Federal Reserve may not launch QE3: The Fed will not launch another round of Treasury buying once the central bank’s second round of quantitative easing, dubbed QE2 , ends in June. It may decide it has stabilized core inflation, which knocks out food and energy, and that it has done enough to keep the bond yield and subsequently borrowing rates low. That was the goal of QE2. However, commodity inflation surely is taking off in other sectors, which makes me wonder whether the only capital control we have now, since we have not been on the gold standard for decades, is China, with its own massive Treasury purchases and its yuan peg to the dollar.

    If government was a small business it would be out of business. Obama’s budget will not pass. American people want this and the time of free spending and higher taxes is over. The president’s budget is unrealistic and the freshman class of republicans over 80 of them, will not agree to more spending. Many of these new members of congress are “brave” something we have not seen in a while or before. They will stand up for what they believe and not back down, many don’t dare if they are not re-elected. This is something very different.

    England raises interest rates ahead of the Royal Wedding.

    Madison, WI, is now Ground Zero for the battle between taxpayers and public unions. I don’t know who’s gonna win, but over the next few days both sides of the argument are going to get aired extensively from both sides and hopefully both sides will realize the other isn’t the enemy. State and municipal governments are broke and something’s gotta give.

    My Best Guess is that new and existing home sales will start to increase 20% by the end of the year.

    CHERYL: Mortgage down payments of 20% will become the standard for new home and existing home loans this year. Banks are pushing it, and the President now wants Fannie and Freddie guaranteed loans to be at least 10% down. Prices fall, but foreclosures fall with them.

    Taking a look at the trend of corporate splits – this one with Williams breaking itself up into an exploration and production company and a pipeline and infrastructure company – Wall Street likes these deals, after Marathon Oil announced a spinoff last month. Right now Wall Street is betting that El Paso Corp. may do the same. Its shares are up sharply today.

    NOW THAT WATSON IS THE BEST “JEOPARDY!” CHAMPION OF ALL = TIME, HE’LL FIND WORK IN THE DOCTOR’S OFFICE. Ibm in a research pact to introduce into medical in 18 to 24 months, but it will advance faster than that

    TMZ gets the first pictures of Steve Jobs since he took his medical leave from Apple.

    DOW HITS 12750 BY MARCH 15TH

    My best guess is that President Obama will continue to play the Artful Dodger when it comes to real budget choices. He is likely to have accomplices in the form of many Old Guard Republicans, who want to pay lip service to the Tea Party but reject actually trying their brew

    Best Guess: A huge flow of European government funds will go in to Egypt, but the United States will soon reevaluate its policy of direct aid to the country.


Mideast unrest will drag on, we never will see a shortage of oil but the current bubble will continue to build, we will start seeing pundits on TV trying to justify why it will necessarily increase to $250+, at some point prior to summer the oil bubble will collapse down to $65 a barrel or less, a lot of people will lose a lot and want another bailout and we will hear a lot of reasons for the recovery stalling other than the billions unnecessarily sent overseas during the current bubble.

March 9, 2011 at 3:07 pm

about this blog

  • Cheryl Casone joined FOX Business Network (FBN) in September 2007 as an anchor. Prior to FBN, Casone served as a correspondent for FOX News Channel’s (FNC) business unit and was a regular guest on FNC’s Your World with Neil Cavuto. Casone brings years of experience covering finance, business, and consumer news to FBN.

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