We have oil tanking and healthcare deflating. I feel other sectors will begin to follow.
We will see though. I hope I am wrong.
Oil situation is only a very minor slices of the problem. i.e., prices did not reflect Russian's attacks on ISIS/Turkey oil smuggling trucks (supply drop), decrease in rig counts in US (supply drop), or the potential escalation in the Shia crescent (potential supply drop).
The bigger problem is, everywhere else in the world is in a recession as reflected in the commodities pricing and Baltic Dry. Part of it could be from China's attempt to shift from construction driven growth to domestic demand growth. Even then, China's export number sunk low, signaling worldwide demand is anemic.
The catalyst for this past few days sell off is Third Avenue halted redemption for their high yield credit fund as they can't sell high yield bonds fast enough to fulfill the redemption demand. That grabbed the headlines and spooked many on the insufficient liquidity in the high yield market, especially for the energy/commodity ones. Illiquidity tends to turn into insolvency rather quickly for the levered high yield guys.
p.s., high yield market has been broken for the whole year and media has just starting to catch up.
p.s.s., @MSchapiro above is the reason I am cautious about SCTY/SUNE, especially when the latter is using off balance sheet vehicles to increase assets in the residential space (low quality, similar to SCTY).
BioTech deflating. Healthcare is not. Gotta thank ObamaCare that caused the insurance price surges and M&A to create giant health insurers to jack up prices even more. It's an wonderful idea to siphon more subsidities in addition to already ridiculous medicare into Health Insurance Complex!
"[,,,] problems in the subprime market seems likely to be contained.” - Bernanke, 2007
ISIS had been "contained" - Obama 2015
Junk bond weakness being contained - ??? 2016
Stone Lion Capital Partners Suspends Redemptions in Credit Hedge Funds
At work we had a weird request to look into pharma stocks and particularly VRX. Since we have no insider knowledge of that sector we just gave a view of what equity analysts were saying and stock prices throughout the year as requested. The funny part of the request was to "predict a bottom" as this person seems to have had a large stake pre-drop and wants to buy more at a bottom to dollar cost average. Seems even people with a high degree of financial knowledge think a bottom can be predicted these days...
I laughed and thought I would share.
Since we are close to 2016, is anyone changing strategy for their longer term holdings? I have debated moving some of my International Fund allocation into an Emerging Markets Fund but EM got killed this year.