Antaeus Wealth Advisors LLC has weighed in on its perspective for the coming year, and the changes it will bring.
Domestically, Antaeus analysts expect GDP growth to fall in the range of 2.5%– 3.0% in 2015, perhaps higher if oil prices continue to fall. They also suggest that America may expect US Core and Headline CPI (inflation) to remain relatively low, due substantially to sluggish wage growth, falling oil prices, and falling industrial metals’ prices.
Because of these expectations, the firm suggests that, while an increase in federal funds is likely within the coming year, it isn't anticipated to exceed more than 0.25%–0.50% by the year’s end. Analysts say it is plausible that the Federal Reserve is committed to avoiding an abrupt rise in rates because of its concerns about slowing the economic and employment recovery in the US.
With falling demand by the US and China, America’s significant shale oil extraction, and a global supply glut, Antaeus expects both West Texas Intermediate (WTI) crude oil and Brent crude oil prices to be at or below $80–$90 per barrel in 2015. While this is potentially troubling news for oil companies, as their profits may suffer, it means that the price of gas – and, thus, transportation costs for goods and commodities – will lessen, providing a spark to the American economy.
Antaeus believes that the US dollar will continue to appreciate relative to the yen and the euro. The Bank of Japan and European Central Bank appear to be committed to additional accommodative policies in their efforts to avoid deflation: perhaps the US dollar will reach $1.05–$1.15 per euro by the end of 2015. Assuming that low interest rates continue in Japan and Europe, they also see a possible rise in prices of Japanese and European small-cap stocks, fueled by low costs of capital and relatively low valuations compared to US small-cap stocks.
Most recently, on Oct. 31, the $1.1 trillion Government Pension Investment Fund of Japan announced that it had set allocation targets of 25% each for Japanese and overseas equities, up from 12% each. This policy change, Antaeus explains, is likely to increase stock prices is those regions.