Note Précis February 14,2018: Mortals Don’t Walk On Water: Amid capital markets flaring into higher volatility, it is worth recalling that it is normal. Central banks previously have acted as restraining forces on massive deficit financing, currently need to do so but appear too genteel. Extrapolating quantitative ease already engineered does not mean that crowding out in financial markets cannot occur. Many countries, consumers and companies are already structured on elevated debt. In the already rising cost of borrowing, yet to kick in are uncertainty premiums of the 1990s variety. With trade and politics tense, currency volatility beckons. The market abnormality has been in the accruing of major gains in myriad asset classes, including that until recently in short volatility instruments. Technical market aspects (like the recent short volatility collapse) can be more than a shot in the dark. They could presage fundamental change versus ample liquidity assumptions. This S&P 500 earnings gain phase already stretches to eight years. Instead of market share, companies cannot be oblivious to margins. Recent results show worldwide revenue competition to be severe in production, services and resources alike. At low unemployment levels in the OECD countries, labor costs could increase pressures. At current valuations, equity price volatility is likely to be far from subdued. Unlike during momentum, more risk premium gatekeeping is likely. It includes quality and diversifying such as into precious metals.
Kind Regards,
Subodh
We look to earn our independent research value for you. To avail of our services and complete note access information, contact us as below and on www.subodhkumar.com.
Our StrategeInvest précis is on Twitter at @subokumar ; on Google+ at www.Google.com/+SubodhKumarCFA; on Facebook at http://www.facebook.com/subokumar ; and on LinkedIn
Subodh Kumar,CFA/1.416.666.4590/mob:1.416.877.5603/fax:1.416.239.4590/Subodh Kumar & Associates – division of StrategeInvest Inc (Canada Corporation Number: 445643-2)/Thorncrest P.O.Box 60006/Toronto,On/Canada M9A-5G2/To remove mailto:subodh.kumar@sympatico.ca
StrategeInvest’s independent consultancy operates as Subodh Kumar & Associates. The views represented are those of the analyst at the date noted. They do not represent investment advice for which the reader should consult their investment and/or tax advisers. Any hyperlinks are for information only and not represented as accurate. E.o.e.
The value of investments may fluctuate up and down in value. Past performance is not necessarily indicative of future results. Our reports and documents may contain forward-looking statements or forecasts. Such forecasts are not a reliable indicator of future performance. Our commentary/analysis is not intended to, and does not, constitute an offer or solicitation to buy and sell securities or engage in any investment activity. Our reports are only for informational purposes with recommendations not made with respect to any particular investor or type of investor globally. Securities, financial instruments or asset strategies mentioned herein may not be suitable for all investors and do not take into account an investor’s particular investment objectives, financial situations or needs. Investors should seek independent financial and or tax advice regarding the suitability and/or appropriateness of making an investment or implementing the investment strategies discussed in our commentary or reports. Our commentaries and reports are as of their publication date with specific information that may no longer be current. There is no intention to update the commentary/report and should not be used to make an investment decision.