IF I HAD TO PICK - It isn't easy writing about markets this time of year, especially if you are looking for any short-term insights. Nothing to write home about thus far, although if I were to highlight some price action in the early week, I would say that Cable has been very well offered into rallies, the Euro has extended declines and commodities remain weak, with oil to new lows. Fundamentally, other than the ongoing US Dollar demand, there hasn't really been any catalyst for the movement. Elsewhere, US equities have pushed to another record high, with the SPX500 finally trading into the 2100 area. The market has grown so accustomed to the bullish trend here that it feels like we will only continue to push higher in 2015.
MORE ABOUT STOCKS - Of course, I don't believe we will. I will be looking for that major sell-off in stocks. Just as a reminder, I don't believe the pullback in equities will be necessarily reflective of a bad economic situation. I actually think the reversal will be more healthy than anything else and I believe the US economy will continue to show signs of recovery even as stocks retreat. We just need to see some normalization in stocks. 2015 should be the year that will be remembered as the year when Fed action no longer was so correlated with market price action. We desperately need to see markets moving on something other than Fed action and this should be the year, now that the central bank is set to tighten.
KEY THEMES AHEAD - Moving on, I think it will be very interesting to see what the world is like with ECB QE. I am also wondering what the implications will be from the upcoming Greek election, which could see anti-austerity Syriza come to power. This could obviously put added pressure on the Euro. There are many other themes that will require a good amount of attention in 2015. What will be with Japan? What will be with Russia? What will be with China? Where are commodities prices headed? How will the emerging markets hold up? What will the world look like with a tightening Fed? What happens if stocks come under intensified pressure for an extended period of time? I will break down all of these themes as we move forward. But just a minor sampling of some of the things to think about.