Ras Al Khaimah, UAE (PRWEB) December 16, 2014
Just prior to the start of 2015, international research and private equity firm Grace Century, FZ, LLC, has published its annual predictions on global assets, financial environments and the markets. Grace Century enjoyed extremely accurate predictions in 2014, especially in exchange rates and oil, but joined the many who incorrectly predicted higher interest rates. The full report is available to all Grace Century members. A brief overview of the report is as follows:
Geographic Recommendations –
It has become apparent that the U.S. has surged ahead in its recovery. Employment numbers, as well as the benefit of lower energy prices, have jump-started what lower interest rates could not. Simultaneously, Europe has contracted. We do not agree that Europe will stay in a soft mode as does the general censuses. We are bullish on Europe, as well as the United States and Asia.
Banking Sectors -
As stated in 2013, we are reaffirming our favorable view of the banking sector. With the preferential disparity between lending rates and the cost of capital, we continue to see improvement in this sector. Additional mergers are likely as assets and balance sheets continue to be fortified. The U.S. banks should be stronger as rates should rise here first.
Currency/Exchange Rates -
Despite lower U.S. interest rates in 2014, we saw an overall strengthening of the U.S. Dollar. Scott Wolf, Director of Research for Grace Century said, “We correctly called the bottom of the U.S. Dollar versus the Euro and Sterling. Grace Century is now looking for areas under $ 1.20 Euro to sell the Dollar and, slowly again, build Euro and Sterling positions. ”Look for an early surge in the Dollar vs. the Euro from $ 1.15 to $ 1.20,” said Wolf. “We will be selling the Dollar on this strength. The range could be stretched as far as parity. We recognize this and will be patient.”
Stock Market Indices’ -
Grace Century feels that any weakness should be bought as many investors missed the bull market up to this point and are looking to get in. “Price valuations are all relative, and as long as we keep seeing improving top and bottom lines with good margins, the market has to be bought, but not blindly–one must wait for the sell offs,” Scott Wolf explained.
Real Estate -
With increased prosperity and jobs rebounding, we should see continued improvement in the real estate sector. Lower rates and increased inventory will add to the momentum. Locally, Dubai saw very strong activity in 2014, and we don’t see any reason for this to stop as the U.A.E. benefits from its center point for stability and strong commitment to facilitating economic enterprise.
U.S. Interest Rates -
We are still bullish on rates even though we were wrong in 2014. As the stimulus ends and the economy recovers, rates have nowhere to go up. The fact of the matter is that the longer they stay low, the higher they will go. We still expect 3-3.25%, on the 10 year note, in 2015.
Gold & Oil -
Grace Century maintains a neutral to bearish stance on precious metals. With the weakening oil prices, lack of inflation and strong dollar, the firm just does not see any reason to own metals. As it relates to oil, Grace Century correctly forecasted prices under $ 75 barrel and now recognizes that the markets should become more volatile. The predicted bias will be lower, with a possible $ 40 target. “We can even make a case for $ 20 Oil,” claims Wolf. “Each $ 10 move lower has a profound effect on GDP in the United States. It is estimated that for this incremental decline, an additional .25% is added to the yearly GDP. The $ 40 decline would equate to 1.25% additional GDP. We don’t share the same bearishness on gasoline, at least not at the pump, despite lower oil prices. ”It will reach a point where lawmakers will find it irresistible to add additional tax in an effort to fund failing infrastructure demands as well as other needs. This will put an artificial floor on gas prices,” Wolf stated.
“We recognize that some of our opinions and predictions are contrary to the markets’, and so we want to stress that these are, in fact, are the opinions of the Grace Century international research team,” Wolf concluded.
About Grace Century
Grace Century FZ LLC is an International Private Equity Consultant located in Ras Al Khaimah, just north of Dubai, in the United Arab Emirates. It specializes in conducting due-diligence for its group of international members, as well as assisting firms in the development and execution of “game changing” ideas in Life Sciences. Utilizing its vast network, Grace Century assists in capital formation, market penetration, joint ventures, and brand development. For more information, visit: http://www.gracecentury.com.