KKR's Outlook For 2016: U.S. Equity Market – Adult Swim Only

Outlook For 2016: U.S. Equity Market - Adult Swim Only by KKR

We approach early 2016 with caution. In our view, valuations are not cheap at a time when central bank policy in the U.S. is changing, global trade is stalling, and corporate margins are peaking. Also, ongoing Chinese yuan depreciation is significant; it literally means that every other country now must think through whether it needs to further devalue to remain competitive. Not surprisingly, we are below consensus in terms of both GDP growth and inflation forecasts for most regions. With these thoughts in mind, we are electing to tilt our portfolio defensively in 2016. See below for details, but we are raising substantial Cash, initiating our...