Felix Zulauf 2015 Predictions
The new year will be a volatile one for markets, according to a downbeat prediction made by Swiss hedge fund manager Felix Zulauf at Barron’s annual roundtable discussion this weekend. Describing the new year, Zulauf said: “It will be a trader’s dream, but an investor’s hell.”
Felix on Bonds
He expects that the economy will struggle in 2015, contrary to forecasts made by other analysts. This, he believes will pull down stocks and result in a pullback, one that is overdue. Yet, Zulauf noted that the recent bond returns slide could go for the US stock market. On Friday, the 10-year U.S. Treasury bond closed at 1.87%. The 30-year bond closed at a near-record low at just 2.44%.
Felix – Stocks to Drop
Speaking about the major US stock indexes, Zulauf noted that there had not been a decline of 10% for over three years. He believed investors were complacent, which has made the market vulnerable. He said a large market correction was likely, and US stocks could see a decline of up to 15% by the spring.
A decline in US stocks would likely be triggered by lower than expected earnings in the U.S.which have resulted because of the strong dollar, according to the hedge fund guru. He believed this could trigger a global fall in stock prices. Zulauf predicted that “central-bank monetary policy will get even easier in the face of this decline.”
The Swiss Manager on Oil
Zulauf also spoke about the recent fall in oil prices and their effect on the economy in the new year. He took the view the dip would have a negative effect on the economy and markets. “The oil-price slump will hurt the economy dramatically in terms of capital spending and employment,” he is reported to have said at the round table.
Although Zulauf noted that the decline in oil prices would mean consumers could enjoy lower energy costs, he was of the opinion that consumers would be saving this extra money rather than spending it.
This year, Barron’s roundtable was attended by some of the biggest names in Wall Street, including “Dr. Doom” Marc Faber, Goldman’s Abby Joseph Cohen and Janus’ Bill Gross. Barron’s published highlights can be found here. Please comment below what do you think about Felix Zulauf 2015 predictions.
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