General Arguments
- The US dollar should continue to strengthen as the US Federal Reserve tightens and other developed/large economies (EU, China, Japan) do not. Equity (SPY)(DIA)(QQQ) and bond (CLY) values are still nonetheless stretched.
- The US dollar's strength is a headwind to precious metals, such as silver (SLV) and gold (GLD). I offloaded precious metal positions back in October and still feel gold/silver remain poor investments unless US data comes back worse than expected and undermines the market's median expectation of two rate hikes in 2017.
- Emerging markets are likely to be up for 2017, but not to the extent of 2016's run through the first three quarters.
- China is a risky market overall due to its substantial credit risk (debt is estimated at over 230% of GDP, with corporate debt at nearly 150% of GDP).
- Asian exporters are facing positive tailwinds currently and higher-yielding…