Drachmas, Dragons and Bears
The summer is usually a time to relax. School lets out, and you don’t have to deal with as much traffic. You might have already squeezed in a vacation or hosted a cookout or two, but the markets have not been so relaxed. Over the past three years both temperatures and blood pressures rose on different issues and news headlines. In 2013, stock and bond prices plummeted violently when the Fed hinted at the end of easy monetary policies. It was dubbed the “Taper Tantrum.” In 2014, it was both Russia “invading” Crimea and Ebola which shook stocks. This summer it’s the debt crises in Greece and Puerto Rico, and the unknown implications of China’s quickly cooling economy and possible stock market bubble. Let’s spend a few minutes to take a closer look at these issues.
July 2015 Mid-month
Key Points and Market Recap • The drama in Greece may persist for years, but we believe widespread contagion remains unlikely. • The Chinese market volatility and economic decline are growing as issues that warrant investor concern. • Despite the risks, we think the outlook for U.S. economic growth, corporate earnings and equities remains positive.