Financial analysts in the Tippie MBA program expect slow and steady growth in the U.S. economy over the next six months, with the government sequestration causing limited economic impact.
The 11 equity analysts are portfolio managers for the Tippie MBA full-time program’s student-managed Henry Fund, a portfolio of stocks valued at nearly $3 million. In the team’s recent quarterly economic forecast for March, the students anticipate U.S. GDP growth of 2.18 percent over the next six months. The growth rate for 2011 was 1.7 percent.
The team also expects limited movement on equities markets, anticipating the S&P 500 will be at a level of 1506 over the next six months. The barometer closed Thursday at 1560.
The students don’t think the sequester will have much of an impact because of the actual cuts—about $85 billion—are such a small percentage of the government’s overall spending of more than $3.3 trillion.
However, the students expect inflation to pick up this year, with anticipated increases in oil and gasoline driving higher prices. They see an overall inflation rate of 2.29 percent.
The team sees similarly slow but steady growth over the next two years, forecasting GDP growth of 3 percent and inflation at 2.29 percent through March of 2015.
More information on the Henry Fund’s current economic forecast is online at www.biz.uiowa.edu/knighthawk/henry-fund-economic-forecasts-march-2013/. More information about the Henry Fund can be found online at www.henryfund.org.
The Henry Fund is named for the two UI benefactors who provided a portion of the initial $50,000 in capital. Henry Tippie is a 1949 UI graduate who owns several companies and has provided many gifts to the UI business school that now bears his name. Henry Royer is the former chairman and CEO of Firstar Bank in Cedar Rapids and executive vice president of Berthel Fisher & Co. of Cedar Rapids. Income from the fund is used to support scholarships for first- and second-year MBA students, guest speakers, and educational travel opportunities for students.