* Tax Cuts: Fiscal irresponsibility on the part of both parties will likely weigh on domestic economic growth.
* Stagflation: Seems to be a continued risk over the balance of this year.
* Short Term Interest Rates: It is not likely that the rise in short rates will stop here.
* Credit Strain: High yield spreads relative to Treasuries remain narrow vis a vis the past few years. With economic growth slowing and interest rates rising, there is little reason to see a change in the trend of rising credit strain and widening spreads that has recently begun.
* Inflation: Inflationary impulses are rising.
* Central Bankers: They are nearly all on a steady and well defined path of tightening.
* Mid Term Elections: Recent results in Virginia, Georgia, Pennsylvania and elsewhere suggest that there is a legitimate threat of change in majority in the Senate and/or the House.
* Policy Mistakes: Heightened this year as trade tensions (and tail risks) multiply.
* Fiscal Policy: The irresponsibility has "left the barn," is set in policy stone and there is no going back.
* The President: His actions done on the fly and without comprehensive analysis will have continued unintended consequences - in a flat and interconnected world.
* Valuations: Price earnings ratios are still elevated relative to history.
* Machines and Algos: It is very doubtful that the tail that wags the dog (quants and leveraged ETFs) will lose their influence in the next few years.
For those that are bearishly inclined I wanted to mention three possible bearish plays which utilize exchange traded funds.
* My "go to" ETF is to short (SPY) . At about $265 its a "money burner" but it is tax efficient, liquid and perfectly tracks changes in the S&P Index with no tracking errors.
* (SDS) is a more aggressive play. Its a leveraged short against the S&P Index and if held for more than a few days or a couple of weeks, the tracking error and decay is large and sometimes swift. So I use this ETF as a trading vehicle.
* (SQQQ) is also an aggressive and leveraged vehicle which is the inverse to the Nasdaq. Again, this is a trading vehicle to be rented and not to commit to a long term lease!