Deutsche Bank's Jim Reid is one of the few strategists on Wall Street to admit he was wrong (although he may still end up being right). Previewing his annual credit outlook titled "Volatility Ahead", Reid confesses that "we've long felt that as we approached 2017 we would likely be at the turning point of the credit cycle. Indeed our forecasts are for wider spreads in our annual outlook for the first time since the Euro Sovereign crisis earlier this decade. However in the course of writing this outlook much has changed." 

The strategist admits that, alongside virtually everyone else on Wall Street, he became bullish, overnight on just one catalyst: the election of Donald Trump, which was universally panned by most experts (if not here) as a major selloff catalyst only for everyone to pull a "Bill Ackman" and realize the next morning that (as we explained) that Trump is actually extremely bullish for risk assets.

"The forecasts are less bearish than they would have been when we started writing this publication in late October partly because spreads have widened notably since and also the probabilities of a US recession in 2017 have lessened given the possibility of aggressive fiscal spending from the new US administration."