Market Action

  • Rising volatility in U.S. markets and international worries pushed major indices down for the past week. Some disappointing data, particularly in housing, took some steam out of equities.
  • The Euro hit a multi-year low against the dollar over the weekend. Thanks to new, accommodative rhetoric from Mario Draghi the markets see a growing likelihood of QE coming from Brussels, pushing the currency down.
  • In addition to Mr. Draghi’s language, a close associate of Ms. Merkel’s stated that Greece was not a systemic issue to the Eurozone. With concern about Greece’s desire to renegotiate its debt growing the statement caught many by surprise.
  • The Case-Shiller price index reported weaker than onlookers had expected. The sluggish housing market has perplexed analysts and kept a lid on the recovery.
  • Going into 2015 money managers and industry analysts have a strong consensus towards 2015 being a strong year for the economy and capital markets. In addition, 100% of analysts expect bond prices to fall and struggle during the year, the same proportion as last year.
  • Forecasters also expect the dollar’s surge to continue in 2015. Per a Bloomberg report, the dollar and oil have reached an all time high in correlation, at 98%.
  • A survey by the Financial Times of European economists predicted that efforts by the ECB to stimulate recovery would not be effective, even with QE.
  • A fall in commodity prices is putting strong pressure on countries such as Canada and Australia, in addition to other exporters. Low oil and metal prices are forcing economists and bankers to revisit growth forecasts and any other vulnerabilities in their economies.
  • Consumer confidence hit an all-time high in December in the United States. Like 2014, many are looking at the American consumer as a potential source of growth for the U.S. and provider of support for the markets as well.

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