“Los astros están alineados para una mayor volatilidad”

A pesar de la alta volatilidad en los mercados durante la pasada semana, la renta variable global terminó con sólidas ganancias. La semana pasada puede ser una señal de lo que está por venir, ya que esperamos más episodios de volatilidad a medida que entramos en 2015. Un factor importante de esta volatilidad en los mercados serían las condiciones monetarias más ajustadas en Estados Unidos. Además de lo anterior, los inversores deberán seguir luchando con los actuales problemas geopolíticos, particularmente con respecto a Rusia

The Stars Are Aligned for More Volatility
d e c e m b e r 2 2 , 2 0 1 4
Stocks Climb Higher in a Volatile Week
Global stocks finished last week with solid gains, but not without wild gyrations
along the way. In the U.S., the Dow Jones Industrial Average climbed 3.03% to close
the week at 17,804, the S&P 500 Index rose 3.40% to 2,070, and the Nasdaq
Composite Index was up 2.40% to 4,765. Meanwhile, the yield on the 10-year
Treasury inched up from 2.10% to 2.17%, as its price correspondingly fell.
Last week may be a prelude to what’s to come, as we expect more episodes of
volatility as we enter the new year. An important driver of that volatility will be
markets adjusting to less accommodative U.S. monetary conditions. But on top of
that, investors will continue to wrestle with several lingering geopolitical issues,
particularly with respect to Russia.
U.S. Growth Provides a Tailwind for Stocks…
Despite the severe volatility last week, global equity markets, at least in the
developed world, managed to finish with solid gains. Emerging markets performance
was more mixed, underscoring our recommendation to be selective in this space.
Notably, Chinese equities continued to outperform, up more than 5% last week.
Here at home, stocks were helped by more evidence of U.S. economic strength.
Industrial production rose 1.3% last month and is now up 5.2% year-over-year, the
fastest pace in almost four years. The fact that the U.S. economy is entering 2015
with strong momentum should help company earnings growth, allowing stocks to
move higher next year. And while valuations are not cheap, they are supported by
low inflation and ultra-low bond yields. U.S. Treasury yields did rise a bit last week,
but the general trend toward low global yields continues. Last week, 10-year
German bund yields fell to Japan-like levels of 0.60%. Low yields mean investors will
continue to look for opportunities in stocks, rather than bonds, which should
support the equity market.
The drivers of the low-yield environment are falling inflation (contributing to low
nominal gross domestic product), a lack of supply of bonds and shifting
demographics. For its part, inflation remains low even in the U.S. despite decent
economic activity. In November, the U.S. consumer price index fell 0.3%, the
biggest one-month drop since 2008. The decline was largely driven by energy
prices, but core inflation remains low at 1.7% year-over-year.
Short-term interest rates are likely to rise next year, but the lack of inflationary
pressure is providing the Federal Reserve with considerable latitude as it considers
raising rates. On Wednesday, the Fed issued a statement that slightly changed the
language in its guidance with respect to rate hikes. The Fed added a new clause,
Russ Koesterich, Managing Director, is
BlackRock’s Global Chief Investment
Strategist, as well as Global Chief
Investment Strategist for BlackRock’s
iShares business. Mr. Koesterich was
previously Global Head of Investment
Strategy for active equities and a senior
portfolio manager in the U.S. Market
Neutral Group. Prior to joining the firm in
2005, he was Chief North American
Strategist for State Street Bank.
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Weekl y investment
commentar y
The fact that the U.S.
economy is entering 2015
with strong momentum
should help company
earnings growth, allowing
stocks to move higher
next year.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or
solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of Dec. 22, 2014, and
may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary
and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to
accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass.
Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. International investing
involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility
of substantial volatility due to adverse political, economic or other developments. The two main risks related to fixed income
investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market
value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest
payments. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
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One area of increasing
concern, both politically
and economically,
is Russia.
indicating that it would be “patient before raising rates,” a seemingly minor nuance
that helped ease concerns of a sudden hike in rates.
…But Buckle Up for More Volatility
While stocks continue to press higher, there’s no denying the environment is
changing. Back in July, we suggested that as the date of a first Fed rate hike
approached, market volatility was likely to rise from the unusually low levels that
characterized 2013 and the first half of 2014. Indeed, since the summer, equity
market gains have been accompanied by greater gyrations. Between Jan. 1 and
the end of August, the average daily close on the VIX Index (a common measure of
stock market volatility) was 13.5. The average has now risen to 15.5.
In addition to the expected shift in the monetary regime, the rise in volatility is also
being driven by more unease overseas. One area of increasing concern, both
politically and economically, is Russia.
Oil prices fell another 6% last week, and are now down roughly 45% year-to-date.
Lower oil prices will help mitigate the global slowdown, but plunging oil prices are
inflicting real harm on several emerging market countries, notably Venezuela and
Russia. While the Russian market and currency stabilized by Friday, the Russian
ruble had plunged earlier in the week, despite a massive interest rate hike by the
Russian central bank. The rate hike was the largest single increase since 1998,
when Russian rates soared past 100% and the government defaulted on its debt.
Given this history, there is growing concern that despite a current account surplus
and relatively low levels of debt, the combined effect of lower oil prices and
economic sanctions leaves the Russian market vulnerable to speculative
pressures. In short, the worry is that an economic contraction morphs into a
financial crisis in the country.
Piecing it all together, we end the year with a few key recommendations: Prefer
stocks over bonds, but be selective; prepare for volatility and focus on assets
where value offers some downside protection; finally, seek growth