Donald J. Trump was sworn in as the 45th President of the United States. President Trump steps to center stage. Bring us jobs, bring us tax reform and bring us a grand fiscal infrastructure spend. That would be positive.
I hate making predictions. I got the tech wreak and sub-prime right, but was far too early on those predictions.
Today, let’s take a look at the most current equity market valuations for they can tell us a great deal about future 7-year and 10-year annualized returns. We’ll also look at the bond market. Total U.S. credit market debt-to-GDP is nearly 355%. Global debt-to-GDP is 325%.
Included in this week’s On My Radar: -Pension Fund Red Ink – Check Out Your State (Chart) -Foreigners are Dumping Treasury Bonds at Record Rate -The Year in Review -Trade Signals – Strong Dollar, Weak Gold, Equity Trend Up, Bond Trend Down, Sentiment Remains Far Too Optimistic
I’ve fielded a large number of investor questions recently around tax cuts and earnings. The idea is that tax cuts, for both corporations and individuals, will significantly improve corporate earnings and thus propel the market higher.
“If you’re not getting better, you’re getting worse.” – Walter Bahr
While on the surface the Italian Referendum appears to be only about the structure of government power and Prime Minister Matteo Renzi’s desire to pass economic reforms, beneath the surface is a serious financial issue that has the potential to impact not just Italy, but Europe and beyond. This may sound small and meaningless to you and me but it is not.
What are the most important investment implications that you and I and your clients might consider post last week’s election?
The last two OMR’s have talked about the long-term debt. I believe it is the significant headwind we face. As CMG’s Brian Schreiner said to me this week, “The math doesn’t allow for a soft landing.” Read on and please let me know what you think.
I’ve written a great deal about debt. In last week’s piece, I showed the enormity of the problem. Growth is slow and I believe will remain in the 1.5% range. Not good enough.