Crucial news is on the calendar this week for those who believe in a stronger than expected U.S. economy in 2011

01/24/2011 4:27 pm EST


Jim Jubak

Founder and Editor,

Major events this week for those investors—and I put myself in the number—who believe that the U.S. economy will beat expectations this year—and take U.S. stocks upward with it.

The Federal Reserve meets for the first time in 2011 on Tuesday and Wednesday of this week with its usual statement on its view of the U.S. economy due out Wednesday afternoon. If I can judge from recent statements by Fed members, the statement is likely to express a guarded optimism about 2011 that would be, in Fed terms, an endorsement of the belief that the recovery is headed toward self-sustaining status. I don’t expect anything as straightforward as an upgrade in the Fed’s projection for U.S. growth in 2011 but I do think we’ll see some kind of shift in language that suggests the Fed is more optimistic.

If you want hard numbers, you’ll have to wait for Friday when we get fourth quarter GDP data. The median forecast from economists calls for an increase in the annualized growth rate to 3.4%. Anything less than that will be a big disappointment and I think Wall Street is expecting that the U.S. economy will show growth of 3.5% to 3.7%.

Good readings on these two numbers will increase the trend among Wall Street analysts to recommend over-weighting U.S. stocks in 2011 and lead to more money deciding that the smart move is to sell risky overseas assets and bring money back home.
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