Barron's published highlights from its annual roundtable discussion this weekend, and among the participants was Swiss hedge fund manager Felix Zulauf.
Overall, Zulauf has a downbeat view of the economy for 2015, and expects there will be tons of volatility in markets this year.
But because volatility will reign supreme, Zulauf said of the investing landscape, "It will be a traderís dream, but an investorís hell."
Zulauf said that the biggest thing going for the US stock market right now is that bond returns stink. On Friday, the 10-year Treasury yield closed at 1.83% while the 30-year was near a record low at 2.44%.
Zulauf, however, expects that the economy will struggle in 2015 despite forecasts to the contrary, and this is likely to pressure stocks. Moreover, it's been awhile since there has been a correction in the stock market, and we could be overdue for a pullback.
The major U.S. stock indexes havenít declined by 10% for the past three and a half years. Extreme readings of investor sentiment reflect a lot of complacency, which usually makes a market vulnerable. A lot of multinational growth stocks are extended on the upside, and cyclicals are extended on the downside. Usually, this situation ends in a big correction. I expect a decline of 15% or so moving into the spring. It could be worldwide, and probably triggered by earnings disappointments in the U.S., due to the strong dollar. I assume central-bank monetary policy will get even easier in the face of this decline.
The roundtable also talked about the decline in oil prices, and Zulauf took the view that the slide in oil would be a negative for the market and the economy.
"The oil-price slump will hurt the economy dramatically in terms of capital spending and employment, and a lot of oilfield jobs are high-paying jobs," Zulauf said. "Yes, lower oil prices will bring down the cost of energy, which is good for consumers, but the private sector is going to save this money, instead of spending it."
The Barron's roundtable, which this year also included folks like Goldman's Abby Joseph Cohen, Janus' Bill Gross, and "Dr. Doom" Marc Faber, is a must-read for anyone who wants to get an extended read on what some of the sharpest folks on Wall Street are thinking about heading into this year.
Read the full report from Barron's here ĽNOW WATCH: We Did The Math: Should You Buy Or Rent In These Major Cities?
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