According to BNP Partners, benchmark US stock market index, the S&P 500, has seen 8% of its value vanish in the weeks since the Federal Reserve finally delivered the 25 basis points rate hike it had been threatening markets with for most of 2015.

Since market opened again following the holiday season, the S&P along with its fellow index, the Dow Jones Industrial Average, been rocked by acute volatility that has been characterized by several days where stocks have swung back & forth by 1.5-2%.

“Investors are finally starting to ask the questions we’ve been asking since 2014; namely, without cheap money, what exactly is it that’s holding up these lofty stock valuations because it most certainly isn’t the outlook for the US economy,” explained Yannick Touré, BNP Partners’ chief economist.

The Shanghai, China-based broker-dealer has made no secret of its belief that the US economy is heading for a recession and that it will be the Federal Reserve’s reaction to it that will reinvigorate the commodities supercycle and the emerging market equity markets.

“Our institutional clients are all positioned to take advantage of the Fed’s inevitable climb-down over its plans to tighten monetary policy and a resumption of monetary loosening,” said Gerald E. Powers, Chief Investment Officer at BNP Partners.

While Powers was unable to be specific, he said the firm had taken positions in gold, gold miners and in a selection of Asian blue chips that had seen sharp selloffs during the rout in Chinese stocks in the second half of last year.
About BNP Partners:
At BNP Partners, they define effective wealth management as an overall strategy that seamlessly integrates their clients’ personal ROI (return-on-investment) aspirations with their investment management prowess.

Whilst today’s markets can often demonstrate the type of characteristics that have served to hamper the efforts of many traditional investment methodologies to secure the returns they once did, BNP Partners continue to secure exceptional returns for their esteemed clients utilizing a meticulously applied combination of those same traditional methods whilst diligently complementing them with new, pioneering techniques.