6 Long-Term Bullish Trends That Will Reward Patient Investors For Years To Come

Overall, Wall Street strategists are generally bullish on stocks for 2012.  However, all of the published forecasts are riddled with caveats.

Citigroup's Tobias Levkovich expects stocks to close 2012 at around 1,375.  Like everyone else, his forecast also includes some bearish risks.

Longer term, Levkovich is decidedly more bullish.  He recently published a special report titled The Raging Bull Thesis.

He points to six bullish trends that he expects to develop in the U.S. economy over the next several years.

While each individually is important, the coalescence of these developments could prove to be very powerful for investors. It is relatively rare for just one concept to drive investors in a particular direction but it is often the combination of several catalysts that can act as the fuel for stock price trends. Thus, there is a good reason to be bullish about the coming several years in equities despite fears around high (and thereby perceived unsustainable) corporate profitability as well as justified European economic concerns."

Some of these trends may surprise you.

U.S. fiscal issues will move closer to a resolution

Mandatory federal spending will rise significantly in 2014, but the bond markets won't stand for this.  As such, Citi expects leaders to make significant shifts toward fiscal restraint in 2013.  As fiscal uncertainty recedes, risk premiums should contract and stocks should rise. 

Source: Citi

The US will become much more energy independent

Citi notes that conventional U.S. oil production peaked in the 1980's, but the advent of unconventional drilling and shale extraction is just beginning.  Automobiles are becoming much more energy efficient.  Furthermore, Citi analysts believe U.S. oil imports will gradually fall from 9 million barrels per day to 2 million barrels per day, the bulk of which would be imported from Canada and Mexico.

Source: Citi

The US housing market is bottoming and will begin a bull run

Excess home supply is falling and Citi analysts believe home prices are bottoming.  An improving housing market  would have broad bullish implications including a growing construction jobs market and a healthier banking system.

Source: Citi

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See Also:

• BlackRock's Bob Doll Makes 10 Predictions For 2012
• The Top 10 Business Stories Of 2011 That Made No One Else's Top 10 List
• 10 Reasons Why The American Economy Is Awesome