STT Analysis Fails To Consider QE Exit In Bear Case

After characterizing 2014 as the year of divergence, a report from State Street Global Advisors projects that the U.S. will remain “the best house in an improving neighborhood.”

In its 2015 ETF Investment Outlook report, the marketer of index stock investments said they expect overall corporate profit margins to remain elevated, leading to a recommendation of bullish cyclical sectors over defensive stock plays.

The impact of QE

While central bank stimulus, such as QE,plays a role in the base case analysis, the bull case is where the economy has achieved escape velocity and “central bank policy plays a diminished role” in boosting the economy." In other words, good...