A monthly benchmark of financial advisors’ confidence in the economy and markets. A reading below 100 indicates pessimism, over 100 indicates optimism.
REACTION FROM OUR PANELISTS
“While the economy should continue to trend along at recent growth rates (+2 - +2.5%) the US equity market appears to be overvalued on a relative (to foreign) and historic basis (to itself). With this being said we are looking to sell overvalued equities and replace them with more attractive option strategies that provide yield and flexibility to buy at lower prices. Fixed income in the US remains overvalued, however, the persistent buying of dips in prices will likely continue as negative interest rates make the relative value trade more attractive,” Patrick Hejlik, Fourth Quadrant Asset Management.
“The ability to sustain a healthy economy with more and more debt is unrealistic. More and more downward earnings revisions, lower revenues, shrinking margins... Add the EU, terrorism, poor political leadership, Russia/Putin/Syria/Al-Assad/North Africa/Boko Haram... I could go on but I think you get the point... Frankly neutral could be optimistic,” Paul C. Spitzer, Advanced Practice Advisors.
“While I am favorable on the US Economy and Markets as whole I see much greater opportunity with the markets overseas. Our economy is stronger, yet the overseas markets have greater opportunities,” Michael Gauthier, Strategic Income Group.
“The direction of U.S. interest rates is very much at odds with the direction of interest rates elsewhere. The implications are broad and involve further U.S. dollar strength, if it continues. This may be a drag on performance a year or so from now as relative costs become more pronounced despite of some positive aspects to this. Still on a relative basis the U.S. continues to shine above much of the rest of the investable world. For now,” Raul Elizalde, Path Financial.
“This is a recovery like never experienced by most that are living. Most in the investment business have been and continue to apply the same recovery logic that usually occurs with recessions and it is not the same sequence of one that has survived the depths of a great depression type of collapse. The ever slow improvement of economies around the world will continue to frustrate market timers, tacticians, chartists, and naysayers,” Tim Baker, Timonier.