fungible thoughts

Quick thoughts on where markets will be/are:

1. Multiple expansion thru 2019; bull market to continue or trade sideways with lower earnings estimates, lower guidance. P/E forward and trailing, P/S, P/CapEx, all rising thru 2019
2. Small cap debt expansion as small business owners feel more wealthy when tax season comes around in 2019, combined with rising defaults on personal debts
3. Slower housing as a result of more expensive mortgages, less refinancing; further consolidation of wealth to middle class that bought single family homes in the early 2010’s
4. Flat real rates as inflation rises mildly along with gasoline prices this summer into higher nat gas prices into winter. More expensive imports (fiscal policy)
5. Flatting yield curve on long end, steeper on short end with the infection point decreasing signalling decreased optimism on future growth, end of existing govt bond purchases by central banks.
6. Emerging market yields will continue to rise to combat the rise of the dollar; currency flows important to watch to determine winners/losers in coming debt restructuring (2019-20?) Might see some runs of EM ETF’s, which cause some liquidity issues in smaller markets.
7. No ETF liquidity worries, unless markets stop functioning properly for several days. No way to call another vol spike like Feb. ’18. VIX continues to stay bounded around the 12-16 range on average, gone are the single digit vol days, with less Central Bank purchasing (of course, barring a significant change in geopolitcs).
8. Swedish market may see some M&A activity with weak krona, especially from the eurozone.
9. Watching cryptos for more use case adoption. Right now only diehards believe it is a store of wealth, only use case that’s fully developed is black markets.
10. Big tech led markets up so it will lead markets down.

/tommander-in-chief

Opinions are my own.