Will you be paying more at the pump in 2014? Will your house be worth more? What about your 401(k)? Find out what Wall Street and Main Street say.
How many times have you watched the news and wondered if the talking heads really know any better than you about the state of the economy?
In order to find out, Money Talks News money expert Stacy Johnson for nearly a decade has put Wall Street and Main Street head-to-head when it comes to predicting how the economy will fare in the upcoming year.
Watch the following video to learn what finance experts say 2014 will bring for stocks, oil prices and the housing market. Then, see if the man on the street agrees.
Will stocks go up or will they go down?
Last year, both Wall Street and Main Street agreed the stock market would see an increase. Both were right, although each hugely underestimated exactly how much the stock market would surge.
The Dow Jones ended 2013 with a 26.5 percent gain, which far exceeded the 10 percent growth predicted by a Wall Street expert interviewed by Stacy, and the 5 percent increase predicted by a man on the street.
However, this year, the outlook doesn’t seem quite so rosy. Wall Street is still bullish on the market, with Business Insider reporting that 14 analysts predict an average increase of 5.6 percent for the S&P 500 in 2014.
Main Street isn’t so sure. The man on the street, perhaps feeling that last year was a fluke, predicts the market will contract after a year of incredible growth. The Main Street stock prediction for 2014 is a decline of at least 10 percent.
Oil predicted to remain steady
As for what you’ll be paying at the pump, gas prices might remain largely the same as last year if oil price projections from Wall Street and Main Street are right.
For a Wall Street prediction, Stacy turned to the federal Energy Information Administration. According to this agency, oil prices will average about $95 per barrel in 2014. The Main Street perspective is that prices might be slightly higher at more than $100 per barrel.
Those numbers are roughly the same as 2013 oil prices. Average crude oil prices in 2013 started at $95 per barrel in January and were just short of $100 per barrel by the end of December.
However, it remains to be seen if either Wall Street or Main Street knows what they’re talking about. Last year, both were dead wrong in their oil price predictions. Wall Street said oil would stick around $88 a barrel, while the Main Street estimate was $120 per barrel.
Real estate prices might continue to climb
Stocks weren’t the only thing to have a great year in 2013. As of the third quarter of last year, housing prices had gone up 12 percent. Wall Street and Main Street think real estate prices will continue to climb in 2014, although not by double digits.
Main Street representatives say home values will go up 2 percent to 3 percent in 2014, which is roughly the same as its 2013 prediction.
That number is also on target with a survey conducted by real estate website Zillow of more than 100 real estate analysts and insiders. The consensus of those experts is the housing market will grow 3 percent in the coming year, up only slightly from the 2.5 percent housing growth prediction from Wall Street in 2013.
Last year, Wall Street narrowly edged out Main Street as the winner of the 2013 predictions. Who will come out ahead this year? We’ll all just have to wait and see.
Correction: This post was edited to correct the increase in stocks predicted by experts quoted by Business Insider.