“Based on fundamentals, I don’t think the pullback we had in this market was ever justified. Markets will do what they’ll do. I think you have significant upside here. Therefore, we would think that the bottom has been put in this market,” said Golub.
Rising interest rate hikes were a thorn in the side of the markets in 2018 with the Federal Reserve instituting four increases in the federal funds rate, but 2019 could see an end to monetary tightening.
“In 2018, we were facing a Fed that was tightening monetary conditions. Next year (2019), the Fed will probably be finished raising rates. What the market is struggling with is it’s a Fed that says one thing. Then if you look at inflation, which has gotten weaker, the market is basically saying the Fed is kind of done now,” said Golub. “The Fed is signalling something that is out of sync with the market.That’s what the market is struggling with…The market believes the Fed is going to be done in 2019. That s a huge positive over 2018.”
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