1.  GDP growth will improve as the fiscal drag from reduced government spending falls from 1.5% to only 0.5%, which is a full point of additional GDP growth.  It sounds small but is a big deal!

2.  Unemployment will drop to 6.5% in mid-2014 from 7.0% now.  Further, it will drop to 6.0% in mid-2015.  This suggests much less support from the Fed, which is good in the long run, if not the short run.

3.  From any historical perspective, inflation will remain low, due to the amount of slack in the labor force as well as in industrial capacity.  This is good news for bonds.

4.  The Fed will complete its tapering or end quantitative easing by the end of 2014.  This makes libertarians happier than other Americans.

5.  The S&P will end 2014 up modestly to 1,900 and end 2015 at 2,100 — compared to 1,830 now.

6.  Interest rates will continue to rise.  The 10-year Treasuries will rise from 2.9% now to 3.25% next year and 3.75% in 2015.  (Remember:  rising interest rates are a double-edged sword.)

7.  The dollar will weaken against the Euro, meaning European vacations will get more expensive.

8.  Oil prices have hit bottom but gold, cooper, and soybeans will continue to fall.

9.  An increase in oil prices will not derail our continued economic recovery, indicating the strength of this recovery.

10.  “Hot” themes to watch are 3D printing, LED lighting, E-cigarettes, cancer immunotherapy, and “big data.”  3D printing is already doing well for commercial usage, if not residential.  I thought E-cigaretters were already done but will have to study that some more.  Just imagine being immune to cancer???

Overall, this set of predictions is not significantly different from their previous one, except that it does continue into 2015.  However, one interesting point is that their prediction of S&P ending 2014 at 1,900 is lower than most other forecasters.  But, don’t confuse the vampire squid with the thundering herd!