Trump Deficits Will Be Huge
There is much we don't know about how the Trump presidency will play out. Will the Wall get built? Who will pay for it? Will it have at least some fencing? Will repeal and replace happen at exactly the same time? Will Trump throw a ceremonial switch? Will there be a Trump National Golf Course in Sochi? It's anyone's guess.
The Paradox of Chinese Drift
While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable.
Washington, D.C. moves to center stage…
Time for the new White House and Congress to put pen to paper. While the equity markets have sustained their high levels, intra-day volatility in currencies, bonds and equities have surged as those markets attempt to react to every rumor and tweet out of Washington and Trump Tower.
NAHB Housing Market Index: "Builder Confidence Holds Firm in January"
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 67, down 2 from last month, came in below the Investing.com forecast of 69. The previous month was revised downward from 70 to 69.
The Latest News in Alternative Investing
Using alternative investments allows investors to hedge against changes in the market and still see positive returns. Commodity ETFs and real estate investments offer investors options outside of traditionally “safe” investments. The rise of popularity in alternative investments has led to the acquisition of many smaller, specialized firms with specific industry knowledge that claim to understand how to best profit from the many asset classes.
Don’t Drink the Cool Aid that Bonds will Under-perform
Don’t get too far ahead of yourself and drink the cool aid that bonds will underperform. Investor fears of higher interest rates have caused volatility, which we believe presents opportunities in the fixed income markets. Global central banks continue to intervene in the markets in such a way that natural market mechanisms cannot function properly.
Will Q4 Earnings Confirm Recent Economic Strength?
My scorecard for earnings season will look for the following company characteristics: Confidence. I expect most to have a murky outlook, with no reason to set the future bar very high. Important trade relationships – imports or exports. Comments on these fears may create some buying opportunities. Concern about a stronger dollar. Everyone is teed up to watch for this, and we should as well.
American Small Businesses Party Like It’s 2004
Look at what President-elect Donald Trump’s pledge to lower taxes and slash regulations is doing to business optimism here in the U.S. Last month, the Index of Small Business Optimism soared a phenomenal 7.4 points to 105.8, its highest reading since 2004. The National Federation of Independent Business (NFIB), which conducts the survey, reported that attitudes toward capital spending and job creation in particular surprised to the upside. Research firm Evercore ISI called it a “blowout report,” and I have to agree.
The Latest News in Capital-Growth Investing
Finding opportunities outside of traditional investments offers advisors unique ways to diversify portfolios. Crowdfunding is a way to participate in real estate investing without the traditional capital investment required. With the uncertainty of the new administration’s impact on policies, investors need to look for ways to reduce risk and increase growth.
Can Trumponomics Fix What’s Broken?
As you can imagine, I received quite a few comments from readers suggesting that each percentage of tax cuts will lead to surging corporate earnings and economic growth...
How Investors Should Deal With the Overwhelming Problem of Understanding the World Economy
The article is very long. It is long for two reasons: first, it is was originally a two-part article that I folded into one; and second, I am dealing with the very complex topic of investing in today’s global economy. I wrote this article a year ago, and some themes like “be careful of MLPs” are not as relevant anymore, but overall it is still a very useful article for the world we face today.
The Myths and Fallacies about Diversified Portfolios
For many years “alpha” – outperformance of the market on a risk-adjusted basis – was the Holy Grail of investment. Almost all money managers claimed they could produce it. It turned out that few could. Now a new Holy Grail: diversification. But there is little agreement as to what it means.
2017 Forecast: Skeptically Optimistic
As we’ll see, a great deal will happen in the first third of the year that could (and likely will) radically change the course of events in the last two-thirds. Furthermore, the possible outcomes are in the hands of inherently unpredictable individual humans otherwise known as politicians (and not just in the US, thank you very much!) instead of dispassionate market forces. Fancy quantitative models will be of little help.
Digging Down on the Trump Effect
Some sort of fund repatriation will be part of the package. All else equal, that suggests a bias to companies that might gain the most. The Atlanta Fed provides some hard data. Expect tax cuts, probably including some nods to Democrats. This will represent fiscal stimulus. Cyclicals continue to show strength, partly from the expectation noted above. (Eddy Elfenbein). The trade war is likely to be a bargaining approach. It is an error to over-react on speculation. The health care issue is far from settled. Early symbolic repeal? Yes. Real changes? Unclear.
Milliman FRM Risk Matters: Low Rates Make the past a Virtually Impossible Prologue
Factors ranging from China’s evolving economy to the rise of nationalism combined to make 2016 a year that will not be quickly forgotten.