Emerging markets expert Gregory Fisher, head of EM Fixed Income Wealth Management, subsidiary of investment bank Jefferies LLC, says the current rise in value in US stocks is not likely to be sustainable.

Citing a bull market which was “long in the tooth”, among other factors, the investment specialist who spoke on the opening night of the 12th Investment and Capital Markets conference, which is being held in Kingston by the Jamaica Stock Exchange between the 24th and the 26th, said the markets were destined for volatility during the coming year.

Jefferies LLC is co-organiser of the conference with Fisher himself, who was previously with Oppenheimier & CO, being a supporter of the Jamaican investment forum for the last 12 years.

As it relates to the rise in US stock values, Fisher noted that the seven per cent rally of stocks reflected utter euphoria following the election of Donald Trump to the US presidency.

“I am indeed cautiously optimistic… but the fundamentals will sooner or later become the driving force,” he stated, adding that Trump as president would face uphill challenges in his first 100 days.

He said investors should not be sucked in by euphoria and should take a reality check, based firstly on the fact that three per cent growth in the United States was good but not that great. The US economy, he said, is strong, but not as strong as it could be.

The second important fact, he said, is that it is the Federal Reserve which controls economic cycles and not the president.

“Regardless of Trump, the Fed must be on the same page,” he asserted. “Monetary policy always supersedes fiscal.”

Fisher predicted that the Fed will hike rates four times in 2017, and this, combined with “a bull market long in the tooth,” among other factors, will result in a year of “immense volatility”.

“There were numerous headwinds waiting” in the wings during the year, he said, including the “true effects of Brexit” and issues relating to China and trade. “Reality trumps euphoria”, Fisher concluded.

On a more optimistic note, the investment expert said that once the markets reset — “and this will occur” — there will be opportunities for savvy investors who are ready to deploy assets selectively.

The specialist said that the Jamaican economy continued to show improving fundamentals, and would possibly get a further ratings upgrade if improvement continued along that trajectory.

A credit rating determines credit worthiness and impacts borrowing costs. In late November 2016, Moody’s Investors Service upgraded Jamaica’s sovereign senior unsecured rating and provisional shelf ratings from Caa2 to B3, and revised the outlook from positive to stable.

Fisher said that the ratings upgrade, for the first time in 12 years, had pushed Jamaica’s credit higher than Barbados.

For 2017, he predicted Jamaican bonds would offer little spread over the benchmark, but the fact that ratings remained high was a positive. With inflation at a record low, he added, the fundamentals for the country continued to improve.

In mid-November 2016 Bloomberg reported that Jefferies Group, the investment bank owned by Leucadia National Corp, hired a team from Oppenheimer & Co led by Fisher to run a custody and emerging-market bond business for its wealth management unit.

Fisher worked at Oppenheimer for a decade, with his final portfolio being co-head of institutional emerging-market fixed-income sales — targeting Central American and Caribbean clients.