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Eleven Market-Shaking Events for 2011

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

11. Agricultural Commodity Prices Retreat


Agricultural commodities prices retreat by spring on a strong supply outlook led by grains, with the DJ-UBS Agriculture index falling back to the low 70s level (-20%).

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

10. Coal Prices Rise


Coal prices soar to $100 per ton (+25%) on a sudden uptick in Chinese imports as the country’s power and steel needs pass the levels that can be covered with domestic coal.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

9. Foreign Ownership Issues


A government-involved Chinese company (non-financial such as Sinopec) looks to acquire a major U.S. firm, generating debate about the risks and appropriateness of foreign ownership of U.S. businesses.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

8. Ruthless Mortgage Foreclosures


Falling home prices trigger an increase in ruthless mortgage foreclosures, causing 2007 – 2009 originated mortgages to default at a higher rate and impairing bank profitability through 2013.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

7. Credit Quality Sapped by Rising EPS


Corporate re-leveraging transactions among investment grade rated firms boost the equity mar¬kets at the expense of credit quality by driving EPS higher even as P/E ratios decline on weaker quality of earnings.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

6. An International Rhetoric War


Talk of currency manipulation including from the Fed and QE2 triggers an international rhetoric war which leads to problematic capital controls and/or foreign investment taxation.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

5. The Eurozone Aid Merry-Go-Round Continues


A bailed-out Eurozone nation goes back to the trough for a second round of aid; Germany re¬sponds by demanding bondholders take haircuts as a condition of that additional aid. The Euro falls back past the $1.10 mark.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

4. Spending Cuts Miss the Mark


Congressional spending cuts fail to live up to election hopes, leading to Treasury supply con¬cerns and causing real yields to continue to rise despite constrained inflation outlook.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

3. The Fed and QE2


The Federal Reserve, seeing an increasing risk of a deflationary spiral, expands the QE2 asset purchase program to $1 trillion, creating greater political debate as to the Fed’s role.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

2. Deflationary Spiral


After two years of elevated unemployment, productivity gains slow, causing wages to become unstuck and drop, thereby triggering the early stages of a deflationary spiral.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

1. Another Housing Slump


Home prices could experience another 10% or greater nationwide decline in 2011, resulting in an extended construction industry slump and an increase in mortgage defaults.

Eleven Market-Shaking Events for 2011 Eleven Market-Shaking Events for 2011

Eleven Market-Shaking Events for 2011


Each year, Janney Capital Markets produces a list of events it deems reasonably likely could shake the markets. Check out the surprises Janney expects could make for a bumpy ride in 2011.

Each year, Janney Capital Markets produces a list of events it deems reasonably likely could shake the markets. Check out the surprises Janney expects could make for a bumpy ride in 2011.

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