With yen passing the 100 threshold for risk we wanted to review other catalysts that need watching.
Oil, inflation, fiscal policy, rate hikes all hold within them market risk. We'll explain why.
This is not a call on timing. This is a call on what to watch.
Everybody can say the market (NYSEARCA:SPY) is too expensive and therefore it can go down. Valuation alone is typically not the catalyst to cut expensive stocks or markets. Usually the valuation needs to be popped by something. We wanted to review key catalysts that we are focused on that can be a risk to markets. This report is not necessarily saying they are happening now, but rather a review of what needs a constant watch.
The market can continue up despite high PEs unless a catalyst hits. These are a few key catalysts that can bother markets.
*Fiscal Policy Initiation
*100 Yen
*Oil at $30 or $60
*Inflation / Rate Hikes
Let's go one by one.
Fiscal Policy Initiation
The world is awash in central bank monetary stimulus. For the last eight years initially the US followed by the EU and BOJ have pumped tons of money into the system through asset purchases.
Here's the chart to show how much money was pumped into the system.
