Fundstrat's Lee: There’s a Shortage of Bonds

The video discusses the 2017 market outlook with Tom Lee, focusing on potential shifts in the equity market due to demographic changes and savings trends. It explores the bond market, interest rates, and the impact of market dispersion on active management. The discussion also covers sector performance post-election and the Federal Reserve's role in market volatility.

What is one of the main reasons Tom Lee predicts a mean reversion in the stock market over the next decade?

• Increased government spending

• Significant cash reserves and shift from equities

• Decreasing inflation rates

• Rising interest rates

Why might interest rates in the US approach zero according to the discussion?

• Because of increased government borrowing

• Due to a shortage of bonds and shrinking deficits

• Because of high inflation

• Due to a surplus of bonds

How does market dispersion potentially affect active management?

• It should correlate with better performance for active managers

• It leads to increased market volatility

• It has no impact on active management

• It makes active management less effective

What challenge do investors face when sticking to old strategies according to the discussion?

• They achieve higher returns

• They face increased market volatility

• They experience losses due to outdated playbooks

• They benefit from stable market conditions

What is the significance of the Federal Reserve's shift towards a more hawkish stance?

• It reduces inflation

• It introduces potential volatility

• It increases government spending

• It stabilizes the market

How might the Federal Reserve's evolving role impact the market?

• It will lead to lower interest rates

• It could become a source of volatility

• It could become a source of stability

• It will have no impact

What is a potential outcome of the Federal Reserve's more hawkish stance?

• Increased market stability

• Decreased government spending

• Higher interest rates

• Lower inflation