Dear Reader,
The markets shrugged off the Brexit effect.
I personally do not think big banks will move significant personnel numbers out of London. In the short-term, British real estate could fall 10-20%, but in the long run the UK could become a safe heaven, especially if it lowers its tax rate to less than 15%.
US stocks measured by the main indices DJIA, S&P 500, Nasdaq should rise 5% to 7% this year. US technology stocks are set to benefit selectively. Microsoft, Twitter could benefit. Twitter could become a M&A acquisition target. Facebook seems overvalued. Facebook could stay at these lofty valuations for a long time, but it needs to grow a lot, develop new markets to justify that valuation.
Gold is interesting. In 1-2 years I think the price of gold could fall to 1000 USD, but in the mean time it could rise to 1400 USD.
I predict oil would finish the year above 61 USD.
German 10 year bunds yield is to stay between -0.15% to 0.30% for the next few months. The banking crisis in Italy seems contained. Europe seems to apply bail-ins selectively, as the US did...
In the next 5-7 years emerging markets(BRICS) remain a growth story, provided there is no hard landing in China. Russia, especially, looks undervalued. The rise of the price of oil and the recovery of Russia's economy should benefit the country's stock market.
Kind regards,
Petar Posledovich
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Petar Posledovich
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