8 Key Concerns and Questions for 2008

 |  Includes: FXI, GNAT, IYR, SPY, UDN, USO
by: FP Trading Desk

The year ahead has Tobias Levkovich thinking in eights. Citigroup’s (NYSE: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.