Bottoming is a “Process,” not an “Event”

By September 8, 2015November 19th, 2015Weekly Market Observations (Archives)

By James Dondero | September 08, 2015

  • US stocks finished the week lower, unable to build on their rally off the Aug 24th lows. Stepping back, while stocks could be quite oversold here, market bottoms are typically a process versus an event, and further bouncing and testing around the August lows would be quite normal.
  • One key to the stock market going forward may be the US Dollar. As Mark Okada, co-founder and CIO, recently explained on CNBC Asia’s The RunDown (watch the video here), an advancing US dollar could help propel markets upwards
  • Naturally, bonds have benefitted from the weakness in stocks, with yields on the 10-yr T-Note briefly slipping below 2%. Should stocks test their August lows, yields would likely do so as well – particularly given the relatively high interest rates in the US, compared to those globally.
  • Finally, emerging markets remain weak. Even India, which has been the stalwart in the space, is now struggling to hold a key area of support. Developed markets, such as Germany and Japan, continue to be far healthier in comparison.

The views and opinions expressed are for informational purposes only and are subject to change at any time. This material is not a recommendation, offer or solicitation to buy or sell any securities or engage in any particular investment strategy and should not be considered specific legal, investment or tax advice. There is no guarantee that any of the forecasts will come to pass. Past performance is no guarantee of future results.