2016 has already gotten off to a dramatic start with the Shanghai market dropping 7% and the rest of the world following suit in a mass selloff. The world economy isn’t in the best shape. Markets are showing signs of impending recession around the world, from emerging markets such as Brazil and China to developed markets including Europe and the US. The bull market, should it continue, would be entering its seventh year… quite venerable as far as bull runs go. With this backdrop, Matt, Tim, and Gino discuss what they expect in 2016.
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Description
2016 has already gotten off to a dramatic start with the Shanghai market dropping 7% and the rest of the world following suit in a mass selloff. The world economy isn’t in the best shape. Markets are showing signs of impending recession around the world, from emerging markets such as Brazil and China to developed markets including Europe and the US. The bull market, should it continue, would be entering its seventh year… quite venerable as far as bull runs go. With this backdrop, Matt, Tim, and Gino discuss what they expect in 2016.
On the front of interest rate hikes, the Fed is stating they’re aiming for 1.5% after four more raises through the year. The market expects maybe 1% from two total raises this year.
The US dollar, directly impacted by interest rate hikes, is generally expected to pass 100 this year. By how much is uncertain, but the USD has a history of making major runs should resistance points be broken, and 100 is a major resistance point. The strengthening dollar is also expected to play a part in the euro and dollar coming to parity some time this year when coupled with the EU’s continuing QE policy.
Dovetailing the USD, oil (and other commodities such as gold) will likely continue to be hammered when viewed in conjunction with record oversupply, declining demand, Iran coming online later this year, and OPEC still keeping the pumps flowing until at least June. Time will tell how far oil may fall until it starts rallying again.
Notes
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