Wed, May 24, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: How ironic – economic growth may be the poison pill to the 2012 bull market

Tuesday, March 27, 2012

amb
Steven Michael
The author, Steven Michael, is the Founder, Principal & Chief Investment Officer of Stonehenge Asset Management. He has over 25 years experience in the alternative management space. His extensive financial career began in 1985 on the trading floor of the Chicago Board of Trade (CBOT). He is also a member of the Chicago Mercantile Exchange (CME).

The S&P is up 10% already it the first quarter of 2012. We have had steady growth in the economy and in employment. The markets and the fed have discounted 2.5%-3% growth for 2012.

Although, we are still bullish on US equities, there are risks to this strategy. Ironically, the largest risk may be growth that is beyond the expectations of the Fed and the markets. Before I explain, I would like to discuss the some of the other risks to this.

It seems that oil prices are of much concern to the continued equity rise. Getting beyond the politics and rhetoric of news coverage, oil is probably underpriced relative to geopolitical risks which currently exist. What affects the equity markets are “oil shocks” not just generally higher oil prices. What is an oil shock? Oil would need to rally 80-100% in less than a year to create an oil shock. Higher oil prices alone, will not cause equity price break downs alone. Europe has learned to live with much higher gasoline prices. The fact is that without this type of shock, equity prices will remain ambivalent and the trend of oil consumption relative to GDP and the oil cur......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Third Point's Loeb surfs on as hedge fund washout continues, George Soros has added to his losing bets against the stock market, Hedge funds, VCs and the CIA are throwing money at ex-Bridgewater data scientists' startup, Hedge funds shed retail amid fears of "apocalypse"[more]

    Third Point's Loeb surfs on as hedge fund washout continues From Reuters/Nasdaq.com: Billionaire investor Daniel Loeb said on Thursday that he is still making money even as the hedge fund industry struggles. Loeb, who oversees the $16 billion hedge fund firm Third Point LLC, sa

  2. Investing - Tudor Jones backs AI hedge funds, Massive hedge fund trades highlight insider buying: GE, Pentair, Tempur Sealy, Apollo Global and more, Hedge funds big wigs are buying consumer and selling tech, here's the stocks[more]

    Tudor Jones backs AI hedge funds From FT.com: Hedge fund magnate Paul Tudor Jones has invested in a brace of artificial-intelligence powered "quantitative" hedge funds, underscoring the increasing acceptance that the industry will need to turn more to technology and away from traditional

  3. Soon hedge fund investors won't bet on a man, they will bet on a machine[more]

    From Forexlive.com: The Wall Street Journal is in the midst of a 17-part series that looks at the rise of quant funds. The AUM and money invested in quant funds still trails traditional asset managers but the gap is closing. What's truly amazing is volume. Quant funds make up 27% of trading vo

  4. J.P. Morgan Asset Management launches ultra-short income ETF[more]

    Komfie Manalo, Opalesque Asia: J.P. Morgan Asset Management, the $1.5tln investment management arm of JPMorgan Chase & Co., has launched the JPMorgan Ultra-Short Income ETF (JPST), an actively managed ETF that seeks to provide current incom

  5. News Briefs - A former hedge fund manager is running a free masters program in financial engineering, Trinity Fund Administration Ltd joining the Mainstream BPO Group, Chelsea Clinton's husband joins Silicon Valley's Social Capital, The quants run Wall Street now[more]

    A former hedge fund manager is running a free masters program in financial engineering A former hedge funder is offering a free masters degree in a field that's integral to Wall Street's future. Igor Tulchinsky, a former managing director at Millennium Partners, a New York-based hedge fu