Quant Coalescence

December, 2016: “So….which is it? ”

The markets continue to push higher, as the “Trump Trade” and “Trumponomics” take hold. The question remains; which is it? Are equities still overvalued? Or have the dynamics of a Trump administration completely changed forward growth expectations to a point that stocks are now a good bet? What we do know for now is that the markets continue to be overvalued to a level comparable to the markets right before the 1987 and 2000 selloffs.

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Market Pulse

PCM 2016 Market Outlook: January 11, 2016

I believe that the U.S. financial markets may be nearing the end of the third stock market bubble in fifteen years. By some measures, equity valuations have reached the most extreme point in history. Market "internals" are starting to break down. Unless one has a 25 year time horizon, now is one of the worst times in history to enter into a traditionally allocated "buy and hold" equity and bond portfolio.

Using seasons as a metaphor, it is late fall in the U.S. equity market and economic cycle. There is a winter season coming. Between now and 2022, broad U.S. equity indexes are at risk of falling 50% to 60%.

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