The year ahead has Tobias Levkovich thinking in eights. Citigroup’s (C) chief U.S. equity strategist provided clients with eight key concerns, eight unasked questions and eight plausible and interesting outcomes to consider for 2008.
The concerns:
Stagflation. A global recession. Presidential elections in the U.S. Energy costs. Counterparty risks in the financial sector. A plunging greenback. Sharp declines for home prices. The apparent ineffectiveness of the U.S. Federal Reserve’s actions.
So what are some of the kinds of questions Mr. Levkovich would like to hear more of?
Everyone may agree that real estate prices in the U.S. are trending downward, but where is the value? Where should buyers be looking?
If oil is near $100 per barrel, why are energy companies not earning more?
With at least 95% of equity mutual fund flows going international in recent years, why aren’t more people worried about this craze?
Why do hedge funds continue to attract money despite mediocre returns?
What ever happened to avian flu and will other global fears just fade away?
As for what the future may hold, Mr. Levkovich thinks the Republicans could hold on to the White House and give the American people what they want – a divided government.
Oil prices could fall to the $70-$75 per barrel range on slower global growth, the U.S. dollar could hit $1.25 versus the Euro when the ECB finally cuts rates, the financials are the top performer in the S&P 500, China’s equity bubble bursts and hedge fund consolidation rises.
