More on 2015 Themes:

5) The US Federal Reserve will begin to raise interest rates in September by 1/4%:

• There is definitely some debate on this issue because economic data in the 1st half of 2015 has not been robust.
• The FOMC members, however, have released their expectations and it appears that they see between 1 and 2 rate increases in 2015.
• US Employment is growing, but not wage growth (yet).
• US Inflation remains benign and below the Fed's target.

6) Deflation or Inflation?

US (with this mornings data release):

Canada:

Euro Area:

Japan:

7) Bond Markets lead other financial markets:

• Bond markets have been exceptionally volatile since hitting their low yields in April.
• Bond investors are concerned about future inflation and demanding a yield premium to protect themselves.
• Bond market liquidity has been impacted by the regulatory environment and the ECB bond buying program.

8) Equity Markets are expensive:

• S&P 500 Earnings for the 2nd quarter of 2015 are expected to decline by 4.7%
• 12 month forward Earnings per Share (EPS) are at 16.9 vs. the 5 year average of 13.8 and the 10 year average of 14.1.

And a new theme to add to the list:

9) The consumer is evolving: Baby Boomers are saving more and spending less as they enter retirement. The soon to be largest cohort, The Millenials, have different consumption habits.

And of course, we are still focused on the long-term!

Charts are better at:

http://www.highrockcapital.ca/scotts-blog.html

6 inches?