Saturday, January 2, 2016

2016 Financial Market Outlook


Please find links to two articles that appeared in the Financial Times on Jan. 2, 2016 expressing ideas and thinking regarding how 2016 might shape up.

It will be interesting to revisit these articles at the end  of 2016 and make a mental comparison.



The top tail risks are China's economy slowing down and the US Fed's interest rate hikes.  Other tail risks involve Brazil, Brexit, and US-EU divergence.

The article also contains nice charts of

  1. 2015 Chinese currency devaluation
  2. 2015 crude oil price crash
  3. 2015 stock market returns in US, Europe, and Japan
  4. 2-decade build-up in EM (emerging market) debt


The base case is for US stocks to go nowhere, but for EM and European stocks to rise.

The article also contains a chart showing how US stocks returned approximately nil in 2015 while US bonds performed only slightly better.





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