Summary

• Oil, bonds, and ROW -- the "rest of the world" -- tell us all is not well.
• Index investors will lag.
• I'm sticking with JCP and AMZN.

The signs are everywhere: The answer to "sixty something" was boomer" in The New York Times crossword puzzle we were solving last week. And just today, when we revisited Pandora to enjoy some of our favorite tunes while sorting a month's worth of dirty laundry, we glanced at the laptop screen and espied a Cialis ad. It was followed by a reverse mortgage come-on and a suggestion that Junior and his sister would welcome some burial cash from a life insurer down the road.

OK, we get it. Tempus fugit, old boy; a sixty-something needs to start shoring things up. Alas, it may be too late; nevertheless, we are compelled at this time every year to look ahead. Regrets have their place, but these words offered by Jane Austen's Lizzy Bennet to Mr. Darcy in Pride and Prejudice guide us: "You must learn some of my philosophy. Think only of the past as its remembrance gives you pleasure." We fervently hope, gentle reader, you can remember 2015 with much pleasure.

Our task, though, is to forecast the seminal events and eventful surprises of the upcoming anno domini. Let's jump to it:

• Oil, high-yield bond spreads, government securities' returns and the big ol' ROW (rest of the world) are telling us something: Economic weakness, if not outright recession, lies ahead. Congress, still Republican-controlled, will eschew stimulus, deepening the downturn…
• ...which means the median 1.75% Fed Funds rate on the dot plot of 2016 interest rate expectations is all wrong. The U.S. central bank won't raise rates in 2016 after bumping up the Funds rate target a quarter point this month.
• So, if you believe as we do that stock prices correlate sooner or later to GDP, expect a flat to down equity market in 2016.
• The S&P 500 returned zilch in 2015, which is why - among the stocks we cover - our best calls were recommendations to exit Macy's (NYSE:M) Whole Foods Market (WFM) and Michael Kors (KORS). We whiffed on our buy recommendation on J.C. Penney (NYSE:JCP) but won big by passing the electric Kool-Aid acid test on Amazon (NASDAQ:AMZN). But this is about the future. Equity investors should stick with JCP, we think, because pessimism is so rife that upside surprise in the holiday quarter could lead to big-time short-covering. And Amazon? As we've said in another context, we can't call a top so we can't let go.

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