Although Wall Street’s year-ahead previews have been variously maligned as “yesterday repackaged as tomorrow” I’m not entirely sure why that’s being pitched as such a bad thing.
After all, yesterday (where “yesterday” means 2017) was pretty good. So if the “Goldilocks” regime of subdued inflation and synchronous global growth does indeed extend into 2018, it will mean another year of outsized returns and the continuation of a bull market and an expansion that both have a place in whatever hall of fame these things get inducted into.
I don’t know, but it kind of feels like Bitcoin and short vol. are the new standards when it comes to describing what “decent” returns look like, so when Wall Street suggests that the S&P will “only” hit 2,900 by year-end 2018, that’s tantamount to bearishness.
In short, you could do a lot worse than hoping that Santa delivers a year-ahead forecast that portends more of the same.
Of course if you’re a cynic, your wish list for Santa might look a little different than everyone else’s. Such is the case for former trader Richard Breslow whose latest missive for Bloomberg takes the form of a letter to Santa. Literally.
Here’s a truncated version that summarizes what Richard wants for Christmas – a list that, in his words, “consists of items selected solely for my own pleasure not edification.”
Dear Santa,
First and foremost on my list is that I would like global bond yields to break out higher from these dispiriting ranges. I choose higher because I’d enjoy engaging in debate over how far, how fast and which countries will change rates faster.
I’d like to offer a blanket apology and pardon to Jens Weidmann and the Riksbank… to the former, for helping remind everyone that current ECB forward guidance shouldn’t be set in stone [and] to the latter, for being willing to both inch away from their liquidity flooding trap and set an example for other central banks with an acknowledgment that global growth is a head- not a tail-wind.
I know this one is a big ask, but I’d have more fun with a higher dollar. I’d be excited to see whether higher rates or a rising dollar will have a greater impact on emerging markets. I won’t print a spoiler, but I’ve a pretty good idea which will win out.
My final request, commodities and credit to come by separate post, is that equity markets completely flat-line– frustrating absolutely everyone and hurting no one. Can you just taste how delicious it will be to savor a debate that ranges from imminent collapse to roaring ahead.
And Santa, if I don’t see you, the cookies are in the Tupperware bowl on the table that’s piled up with research reports I promise to read.
Richard
“equity markets completely flat-line— frustrating absolutely everyone and hurting no one” is not what I would call cynicism