Capital Market Outlook

Country Outlook
Asset Class

  • USA
  • Equities – Annual single digit gain, restricted by: move towards fiscal balance and, anticipation of tightening in
    monetary stance.
  • Govt Bonds – A return to market dominated prices from reduced Fed’s purchases is moderated by suppressed inflation
    until anticipation of Fed‘s anticipated funds rate increases in 2015.


  • UK
  • Equities – A new credible central banker’s monetary and regulatory discipline and anemic economic growth bode
    ill.
  • Govt Bonds – Following US Treasury’s lead.
  • Currency – Slow growth and belated austerity maintain pressure.


  • Eurozone
  • Equities – Long deserved Cyprus bank rescue model concerns investors in troubled areas.
  • Govt Bonds - Continued recession and ECB assistance with low interest rates and credit lines give continued support
    for all nations.
  • Currency - Poor growth and continued low interest rates continue to weigh.


  • Japan
  • Equities – Manufactured currency depreciation now provides fuel.
  • Govt Bonds – Low inflation and interest rates maintain support.
  • Currency – Commitment to an inflationary target with low interest rates allows overvalued currency to depreciate.


  • Rest of the World
  • Equities – After strong recovery since 2008 look to take money off the table.
  • Commodities - US monetary tightening and China slowing weigh.


Uncertainties

  • Russian political interference in its return to free market.
  • Chinese growing military capabilities.
  • Iran.
  • Necessary EU & US regulation of modern financial institutions and products.
  • Mid-East political developments.

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