Sun, Jul 24, 2016
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. Opalesque Exclusive: California-based manager launches long/short equity hedge fund with unique algorithm[more]

    Benedicte Gravrand, Opalesque London for New Managers: SJL Capital LLC, an investment advisory firm based in California, has launched its maiden fund, the SJL MarketDNA Hedge Fund LP. The fund, which began trading

  2. Manny Roman to move from Man to Pimco[more]

    Benedicte Gravrand, Opalesque London: Emmanuel (Manny) Roman, an investment world veteran, has been hired by PIMCO, the large US bond fund house, as chief executive officer. PIMCO's current CEO Douglas Hodge will assume a new role as managing director and senior advisor when Roman joins P

  3. HFR: Hedge funds post strong gains in mid-July as markets recover from Brexit losses[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted strong gains through mid-July as the equity markets continued the recovery from Brexit losses. The HFRX Market Directional Index gained +2.17% (+4.22% YTD) and the HFRX Global Hedge Fund Index gained +1.03% through mid-month (+0.19%

  4. News Briefs - Carlyle goes on trial for a financial-crisis meltdown, Private equity and venture capital outperformed public markets in 2015, Pippa Middleton gets engaged to hedge fund manager James Matthews[more]

    Carlyle goes on trial for a financial-crisis meltdown Carlyle Group co-founder Bill Conway was in court on this small island last week recounting one of the most bruising episodes in his private-equity firm’s history: the 2008 collapse of mortgage-bond fund Carlyle Capital Corp. Carlyle

  5. …And Finally - Two men fall off cliff playing Pokemon Go[more]

    From BizarreNews.com: Two men who fell from a seaside cliff north of San Diego told authorities they became distracted while playing augmented reality game Pokemon Go. Encinitas fire Battalion Chief Robbie Ford said one of the men fell about 50 feet down the bluff in Encinitas while the other man fe