Tags: stocks | market | investing | economy

Robertson: Stocks Will Fall 50 Percent on Greece, China, Fed

By    |   Friday, 10 July 2015 06:02 AM

Many financial experts have noted the risk posed to stocks by Greece's debt crisis, China's stock plunge and a likely Federal Reserve interest rate increase this year.

But few have as dire a forecast as Charles Robertson, chief economist of Renaissance Capital. He predicted on CNBC that the S&P 500 index will crater to 1,100 by March 2016. That represents a 47 percent drop from 2,062 Thursday morning.

As for the troika of doom, Greece is struggling to meet the eurozone's Sunday deadline to reach an accord on a debt restructuring package. In China, the Shanghai Stock Exchange Composite Index has slid 28 percent since June 12. And in the United States, economists expect the Fed to raise rates in September or December.

"We're seeing just how fragile it is with that Greek crisis right now," Robertson said. "The second risk is China. That's always a possible problem, which could provoke something much worse. The third is a Fed rate hike, [which has] more unexpected consequences than people assume ahead of time."

Canada Financial Post columnist Joe Chidley sees more than U.S. stocks at risk. His bearish triple play includes Greece, China and the 14 percent dip by oil prices since June 23.

"Add it all up, and we’re looking at a turning of events for the worse," writes. "The Greeks, fittingly enough, had a word for it: catastrophe."

As for Greece, fear lingers that the nation's woes will spread to other debt-laden eurozone countries such as Spain and Italy.

And when it comes to Chinese stocks, there is concern of a meltdown. "Now the bubble has burst, as it inevitably had to, and for about as much reason (or lack thereof) as it had for inflating in the first place," Chidley says. The Shanghai Stock Exchange Composite Index has returned 86 percent over the past year.

In the oil market, the issue is supply. The United States keeps cranking out crude, and more may come from Iran if it reaches a nuclear agreement with the United States.

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Many financial experts have noted the risk posed to stocks by Greece's debt crisis, China's stock plunge and a likely Federal Reserve interest rate increase this year.
stocks, market, investing, economy
339
2015-02-10
Friday, 10 July 2015 06:02 AM
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