Market Commentary February 2015

Category: Market Commentary

02-02-2015

Please find this month's Market Commentary newsletter which contains our view on the stock market based upon fundamental and technical analysis along with some recommended investments for the current market.

Last month, we moved to equalweight on the stock market. In the event, the market exceeded expectations with a 2.8% rise, reversing December’s declines though, unusually, the S&P 500 actually fell 3%.

We used the recent strength in gold and the USD to sell our precious metals allocation with some clients on profits and others losses. Either way, with interest rates forecast to rise in the US in mid-2015, we expect that prices will fall as the opportunity cost of not owning income-producing assets increases. Goldman Sachs had also just reduced their Y/E price target for gold to $1,175/toz (over $100 below the current level). They expect lower than expected inflation in the coming years and a declining marginal cost of production. They also believe that the shift to above-trend growth in the US will continue, with easing financial and lending conditions and lower oil prices helping growth in the rest of the developed world to improve.

 

read