After today, there is one more day of trading left in 2014. The year will probably not go out wildly, which speaks to the possibility the volatility that characterized 2014 might dissipate in 2015. That would be nice, but my guess is we will see some intense volatility as the two “big” stories of 2015 unfold – when will the Fed raise rates and by how much and will the stupid heads in Washington D.C start trouble?
These stories should begin to materialize, oh, right after the new year begins when all the prognostications start floating about in the talking head circles.
My view of 2015 is less of a specific prediction and more of a projection of reality, if you will. I “predict” we will see another year of strong growth in the market (with some volatility), given we have no major natural calamities, none of the current geopolitical fires burning turns into a maelstrom, and the ideologues in Washington D.C. don’t take down the economy and the market with stupidity.
My projection is based on certain premises that are always true.
1) If the economic fundamentals are good, the economy will be good. All signs are that in 2015 the US economic fundamentals will continue to improve.
a. A subset of this is: if the fundamentals of oil remain in place as the basis for trading, the price of oil should go lower in 2015. All signs are that the fundamentals of oil should remain as the basis for trading oil.
2) If the US economy continues to improve, corporate earnings will continue to grow. All signs are that corporate earnings will continue to grow.
a. A subset of this is: if the price of oil goes lower in 2015, the US economy will receive an enormous stimulus, as consumers and businesses have more money to spend. All signs are that the price of oil will go lower in 2015.
3) The breathless media and the politicians of Washington D.C. will do what they do best – blow hot air all over the place stirring up trouble. This will provide the foundation for any volatility the market endures in 2015.
- U.S. consumer confidence increased in December, bolstered by a brightening jobs situation that left perceptions about economic conditions at a high last seen in February 2008, according to a private sector report released on Tuesday.
The question then becomes … Where will the money flow in 2015? More on this tomorrow and beyond.
Trade in the day; invest in your life …
