Monthly Archives: January 2016

China Slowdown Will Plague Markets For Years

January 31, 2016
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China Slowdown Will Plague Markets For Years

What a start to the year. CJF’s contrarian prediction of 1,860 on the S&P came to be on January 20th. Subsequently, the market rallied strongly on the hint of more quantitative easing out of the ECB, and the adoption of negative interest rates by the Bank of Japan. Any doubts that 2016 will be a volatile, and difficult year, should now be erased. After a tumultuous January for investing, a period when seasonality and investment inflows are supposed to support markets, CJF is stepping back to assess big picture dynamics for the global economy and the overall investment environment. At risk of being overly obvious: Something is not quite right with the global economy In the seventh year of recovery since the financial crisis, Brazil is in recession, Russia...

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2016

January 7, 2016
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2016

“I would say happy new year but it’s not happy; it’s exactly the same as last year except colder.” -Robert Clark I find the quote fitting for financial markets, and CJF prognostications, after a very tough 2015, and an inauspicious start to 2016, with a week-one tailspin around the globe. The setup for 2016 isn’t pretty, and investors should brace for a potential sharp pullback in markets, and heightened volatility through the year. Decisive 2016 themes: 1) valuation (high) 2) deflation (pressures global earnings) 3) liquidity (tug-a-war between Fed and “other”) The S&P 500 valuation swelled from 12x forward earnings in 2011, to 17x in 2015. While the market multiple is now somewhat off its high, it remains in the 16x vicinity. High valuation raises the bar for economic/earnings...

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