David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141
www.Bristlecone-VP.com


Failure to Launch

September 23rd, 2015

Stock market volatility returned in August, as a slowdown in the Chinese economy (and a steep selloff in Chinese stocks) reverberated around the globe.  Investors were also on edge as to the timing and magnitude of an eventual “liftoff” in interest rates by the Federal Reserve.  For more than a year now, the Fed has telegraphed its intent to raise rates in the near future (for context, the last such increase occurred in 2006).  Consequently, the U.S. dollar strengthened vs. most major currencies, a trend which has accelerated in the last 12 months:

Trade Weighted US Dollar

Earlier this year, a consensus emerged that the Fed would likely begin raising rates by the time of their September meeting (held earlier this week).  However, a subsequent market correction (the S&P 500 declined 10% within the month of August), along with signs of weakness abroad, clouded that consensus.  Ultimately, the Fed elected not to raise rates just yet, postponing action until either their October or December meetings. Read the rest of this entry »

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