Market Outlook:
The market bears are looking at thinning values and are expecting another 2008-like outcome. The VIX Index is bumping along its very long term average lows, which did lead to the market rout of 2008-09, however, we still do not see the sort of excesses that started that whole bear market off. There are expensive pockets here and there (the recent collapse of the social media stocks), but not the kind of overall excess that necessarily leads to a wholesale rout of stock prices and a major economic setback. While there is no doubt that the excessive monetary expansion does constitute an “excess” from which any serious pulling back will be very, very painful, as far as we can see, the Chair of the Fed, Janet Yellen, has no intention of allowing such an event to occur on her watch and in an election year.
We pay a good deal of attention to what Stephen Poloz says about the outlook, and does in practice. His actions remain bullish for the asset markets and we continue to look for opportunities to take advantage of the central bank actions.
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