Outlook 2016: Terry Flanagan, Markets Media

Terry Flanagan

Terry Flanagan is Managing Editor at Markets Media.

Save the best for last, I always say.

Terry Flanagan, Markets Media

Terry Flanagan, Markets Media

I’m kidding about that. I am going last in the 2016 Outlook Series that ran on MarketsMedia.com over the past month or so, but more because I’m a laggard than because of any pre-arranged placement. There were some solid insights from some solid folks in the series, so I consider myself overachieving just by being included in the group.

Anyway, here are a few random musings on what I see in store for markets this year.

1. China will get its act together.

Yes, the bulletproof, slam-dunk, great-guns China growth story we saw through the 2000s and into the 2010s is gone for good. But I think recent market action has gone too far in pricing in doom and gloom for the Chinese economy, and the Asian giant will at least be headed back in the right direction by year-end.

China is a hot mess right now. Annual economic growth of 10+% is in the rear-view mirror, and policy makers don’t inspire confidence with their herky-jerky policy making.

Such chaos doesn’t bode well for short-term valuations, but in the overall scheme of things I think it’s just growing pains and not a cause for alarm. In the end, a developing economy of 1.3 billion people with strengths in manufacturing, efficiency and innovation won’t be held down.

2. U.S. market structure will be fairly quiet.

By ‘fairly quiet’, I mean there will be no major blowups that land in the headlines of the mainstream press.

Granted this is a risky call, as there are ~250 trading days in the year, and even the most optimistic market operator acknowledges that a technology outage can happen to anyone, at any time. So I wouldn’t bet the farm on this one.

But, I do think that that disruptions such as the ‘flash crash’, the Knight Capital ‘algo gone wild’, and the Facebook IPO served to instill some proper fear in the industry, and that proper fear translated into actions to shore up stability and reliability. Given the ongoing attention to keeping the market’s oil fresh and the market’s tires rotated, I’ll speculate that there won’t be any breakdowns on Highway 2016.

3. Hillary Clinton will not win the 2016 election.

IDK, this is more of a hunch than anything else, and I don’t have a good read on who will be the next U.S. President. But I’ll go out on a limb here and predict that it won’t be Hillary.

I just think Hillary is considered too automatic, and nine and a half months is a lot of time for a candidate who has her share of controversy/corruption baggage to not trip up. Something unexpected will happen between now and November — that may be her campaign hitting an iceberg, or another candidate catching fire, who knows. But something.

There is some boldness to this call, as HRC is currently the odds-on choice to be the next POTUS. You need to bet $110 to win $100 on her winning the general election, according to online bookmaker Bovada; bet $100 to win $250 on Donald Trump, the next-most-likely winner.

Note I am an independent voter with a generally neutral stance on Hillary so this prediction is not at all a function of my political views. It’s a call on what I think will happen, not what I think should happen.

Happy (rest of) 2016!

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