
Michael Howell, founder and CEO of Global Liquidity Index, joins Adam Taggart to discuss the global liquidity cycle and its implications for financial markets in the coming year. Howell forecasts a challenging year, noting that the liquidity cycle peaked around Q4 despite the Federal Reserve's efforts to ease tensions in repo markets. He argues that a shift from Fed QE to Treasury QE will direct liquidity into the real economy, potentially absorbing it from financial markets. Howell suggests that strong economies don't always translate to strong financial markets, pointing to historical data indicating weaker S&P performance in the second year of a presidential term despite strong earnings. He advises investors to consider contrarian assets like government bonds and commodities, anticipating a potential inflection in the yield curve and a stronger dollar.
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