What The Latest Fed Move Means For Markets

  • Liquidity trends have drastically changed since the Fed's latest flip-flop and so we must adapt.
  • Emerging markets could be in the early stages of outperformance against developed markets.
  • Corporate profits signaling the US job market may be in trouble.
  • The US dollar is near support and remains key to future outlook.

Canada's White-Hot Housing Market

  • The Canadian banks are exposed to non-recourse mortgages in Alberta and the longer oil stays low the harder it will be for this province.
  • Foreign buyers are holding up the white-hot real estate markets of Toronto and Vancouver.
  • Chinese policies will affect oil prices and global money flows.

OtterWood Capital Management's Outlook for 2016

  • Bear market has begun but it’s not 2008. This downturn will be front end loaded, as we are seeing now
  • China is in between a rock and a hard place and pressure will remain on commodities and markets until they address their currency woes
  • The US economy will slow down enough to ultimately force the Fed's hand into printing more money (the Fed will engage in QE4)

Ever Narrowing Stock Market

  • November and December are seasonally strong months
  • However leadership is narrowing, the top ten companies in the S&P500 are holding up the index
  • In credit markets junk bonds and leveraged loans are pricing in more stress

Low Quality Rally

  • Markets have rallied but we are not buyers of this dip
  • The rally from August lows has been narrow and this is most evident in retail
  • Liquidity is weak as can be seen in small-caps and IPOs