What Could Inauguration Day Mean for Markets?

01/18/2017
After a couple of weeks in which economic fundamentals were the focus, politics once again intrudes this week. On Tuesday, UK Prime Minister Theresa May is expected to outline her plan for Brexit. She has maintained that Article 50 of the Lisbon Treaty would be invoked by the end of this year’s first quarter. This starts the clock ticking on Brexit. This weekend, a report in the Sunday Times of London indicated that Ms. May intends to call for a “hard” Brexit. In short, a clean break from the EU, necessitated by the desire of the UK to control its own borders and not be subject to EU rules on immigration and the European Court of Justice.

Headwinds Remain as the Economy Gains Momentum

01/10/2017

Somewhat lost in the focus on what the new administration is likely to do has been the underlying momentum in the economy. Last week provided further evidence that growth remains healthy, headlined by the December jobs report. The economy created 156,000 new jobs, and the prior two-months were revised higher by 19,000. Job growth in 2016 followed something of a saw tooth pattern. In the first quarter, monthly job growth averaged 195,000, but slowed in the second quarter to 146,000. It rebounded in the third to 212,000, before subsequently slowing in the fourth quarter to 165,000.

The Reality of a New Administration Becomes Top of Mind for Investors

01/04/2017

In the five weeks immediately following the U.S. presidential election, the S&P 500 rose 6.1 percent, as investors adjusted to the perceived implications of a Trump victory. Financials, industrials, energy and materials stocks were noted beneficiaries. Defensive groups lagged behind. But the rally stalled into year-end. Over the final two weeks, the S&P slipped by 1.5 percent, as the initial sector winners and losers traded places. So, what happened? There were likely several factors at work.