Investors are too bullish about the US, negative about emerging markets, and are neglecting Japan and Europe, he said. India is much better placed and has greater potential to grow than Western economies, Faber said. Corporate profits have still room to expand, he added.
Fundamentally, the dollar is overvalued and valuations in US markets are at historical highs, he said. Any further strengthening of the US dollar will curb the US Federal Reserve’s capability to raise interest rates, Faber said.
The Fed on Thursday raised rates by 25 basis points and in the past indicated the possibility of three interest rate hikes in 2017. Oil and mining companies,
financials and tech figure among his favourite sectors for 2017, he said, adding that he sees a lot of upside potential in agricultural commodities.
- Source, CNBC