Clues and commentaries on the global prospects for stocks, bonds and alternatives.
Selected Document
John Goode Market Review
ClearBridge | January 16,2015

John Goode discusses multiple issues of current importance for the economy and financial markets

  • One of the most significant developments since the last Market Review has been the extraordinary decline in oil prices, which caused the energy sector to be the weakest performing equity sector in 2014.
  • But the decline in oil prices in 2014, in effect, is a tax cut of $150 billion for US consumers and users of energy and more like a $1 trillion+ tax reduction worldwide which suggests this could be a positive stimulus for much of the world economy in 2015.
  • Another significant change in recent months has been the strength in the U.S. dollar. As long as the dollar remains strong, domestic companies may do better than multi-nationals with large foreign interests.
  • We believe M&A activity could be one of the defining trends in 2015. The "returns" from making an acquisition and then rationalizing costs may make much more now sense for many companies than share repurchases because share prices are elevated in many cases.