Purves on Market: 2017 Will Be the Show Me Year

The video discusses the market expectations for 2017 following Trump's victory, highlighting the differences between monetary and fiscal stimulus. It analyzes market volatility, particularly the VIX, and its correlation with treasury yields. The discussion also covers earnings growth, price-earnings ratios, and potential impacts of corporate tax relief. Finally, it explores investment strategies, focusing on the Nikkei and US equities, and anticipates increased volatility.

What is the primary difference between monetary and fiscal stimulus as discussed in the video?

• Monetary stimulus is controlled by the government, while fiscal stimulus is controlled by central banks.

• Monetary stimulus can be implemented quickly, while fiscal stimulus requires complex negotiations.

• Monetary stimulus involves tax cuts, while fiscal stimulus involves interest rate changes.

• Fiscal stimulus is always more effective than monetary stimulus.

Why is the VIX index considered low despite high asset volatility?

• Because the market is expecting a recession.

• Because equity volatility has decreased since the election.

• Because the VIX is not related to asset volatility.

• Because the VIX only measures commodity volatility.

What is the expected impact of rising treasury yields on the VIX?

• The VIX is expected to increase.

• The VIX is expected to decrease.

• The VIX is expected to remain stable.

• The VIX is not affected by treasury yields.

How might corporate tax relief affect S&P earnings according to the video?

• It would double the S&P earnings.

• It would have no effect on S&P earnings.

• It could increase S&P earnings by $12 to $15.

• It could decrease S&P earnings by $12 to $15.

What is the projected change in the price-earnings ratio if Hillary had been elected?

• It would remain the same.

• It would be unpredictable.

• It would be lower than with Trump.

• It would be higher than with Trump.