As we head into the final stretch of 2016, the U.S. dollar has taken control of the markets. As the incoming Trump administration continues to promise fiscal spending and tax cuts, the Fed is now positioning to do a bit more tightening—all while the U.S. and global economic datapoints move higher.
What’s ahead for emerging markets in 2017? Stephen Dover, managing director and CIO of Templeton Emerging Markets Group and Franklin Local Asset Management, and Mark Mobius, executive chairman of Templeton Emerging Markets Group, present their emerging-market equity outlook.
President Obama is spending his last days in office trying to shore-up his “legacy.” He emphasizes that he inherited the worst economy since the Great Depression and most analysts would agree that is true for the most part.
I’ve previously written articles about two separate techniques for improving retirement outcomes: the use of SPIAs and smoothing of year-to-year withdrawals. In this article I investigate ways to combine SPIAs and smoothing to produce even better outcomes. I’ll then broaden the discussion and briefly explain how SPIAs and smoothing fit into the wider context of ways to improve retirement outcomes.
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.
There is a normal dose of economic data this week, but we are entering a quiet, pre-holiday period. As the rally faltered a bit, the Dow 20K talk yielded to a discussion of what could go wrong.
In the fight for American jobs, we could be “risking” a trade war with China right on our southern doorstep. Though the stakes might not be as high as total global domination, they come pretty close. With rates moving up and the world resetting to less quantitative easing, inflation might accelerate. To avoid a global recession, Trump will need to make streamlining regulations a top priority.
To coin an old phrase, the country has “gone ape” in the wake of Donald Trump’s surprise election as the 45th President of the United States. The stock markets have skyrocketed to new record highs day after day. Consumer confidence has soared to the highest level since 2008.
Jeffrey Gundlach predicts trouble for the equity, corporate and junk-bond markets if the yield on the 10-year Treasury bond goes above 3% in 2017. Even the housing market would suffer.
Today we’ll look at stock valuation several different ways, see what history tells us about the future, and then think about how to react. There are good reasons to think that the Trump rally could morph into the stereotypical and expected Santa Claus rally. Toward the end of the letter, I will comment on why. It’s actually kind of a rational process. And then what?
The post-election market run has been accompanied by improving economic data and increasing confidence. The result has the punditry asking a question that seemed crazy in January: Will the Dow hit 20K?
Donald Trump took the world by surprise in winning the U.S. presidential election.; While the Trump triumph and ensuing policy conjecture held the spotlight, a flurry of positive economic releases globally signaled solid fundamentals.; Risk sentiment built, particularly in the U.S.
It's not unusual for a new year to bring changes. But 2017 may be particularly noteworthy. Topping the list is a new U.S. president and Republican-controlled Congress, bringing the prospect of a new direction for many policies, regulations and legislative priorities. Elections and leadership changes also are on the calendar in several major countries, including France, Germany and China. What may not change next year are the geopolitical tensions that continue to pressure several regions around the globe.
Should history regard Greenspan as a “maestro” who managed the economy to new heights of prosperity or as a blunderer who let the housing crisis, and other simultaneous crises, unfold?
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.
Like many others, I was surprised by the results of the election. I guess I was persuaded by the polls that indicated that Hillary Clinton would win, even though the spread had shrunk to something within the margin for error.
It is (ahem) a very big week for new data. The A-teams are back from their mini-vacations, ready to take a fresh look at the new world.
No forecaster has predicted equity returns as accurately has Jeremy Siegel over the post-crisis period. In our annual interview, he offers his forecasts for the coming year.
At one point or another, we have all heard the saying "out with old, in with the new." We do not need to look too far in this modern technological age to find cogent examples, including...
Last week’s letter with my thoughts on what Trump should do generated more responses than any other letter had in the last 17 years. As you might suspect, with a topic so controversial, not everyone agreed with me.
The question now is whether Federal Reserve Chair Janet Yellen will put the brakes on the so-called Trump rally. She asserts that Fed policy is not politically motivated, but I wonder how many people actually believe that. She’s already criticized Trump’s plans to tear up or at least significantly weaken Dodd-Frank Wall Street Reform.
It is a short week without much new data. Even FedSpeak is on holiday. The big story will continue to be the Trump transition.
What are the most important investment implications that you and I and your clients might consider post last week’s election?
Franklin Templeton Fixed Income Group® offers its perspective on the global markets. In this Issue: Uncertainty Ahead of Trump Administration but Fundamentals Remain Constructive; Divergence in Monetary Policies Between World’s Leading Central Banks Likely to Remain Intact; and Eurozone Bond Yields Rise but ECB Likely to Adjust Rather Than Signal End of Quantitative Easing
After years of deriding the airline industry, Warren Buffett confirmed this week that his holding company, Berkshire Hathaway, has invested nearly $1.3 billion in four big-name domestic carriers: American, Delta, United and Southwest.
While people search the market’s behavior for logic, there really doesn’t have to be any. In “On the Couch,” I mentioned that sometimes the market interprets everything positively, and sometimes it interprets everything negatively. The market often fails to act rationally in the short run, primarily because of the role played by people in determining its course. Thus two key observations can be made based on last week’s developments.
Over the last several weeks stock price volatility has increased significantly above norms. All of a sudden it is not uncommon to see stock prices moving 5%, 10% or more in a single trading day.
There is some important data on the schedule for this week, along with earnings and the expected doses of FedSpeak. None of that will attract much attention. Instead expect “all Trump, all the time”.
Like their British counterparts, who voted in June to cut ties with the European Union (EU), American voters resoundingly rejected globalism this week, calling into question the United States’ involvement in military alliances such as the North Atlantic Treaty Organization (NATO)—which is 72 percent funded by U.S. tax dollars--and international trade deals, from the North American Free Trade Agreement (NAFTA) to the Trans-Pacific Partnership (TPP).
Although many were predicting a significant pullback on Mr. Trump’s election, we, in fact, got a fairly significant advance. What’s up with that? I suspect there are several reasons.
Trump’s victory may be a positive for the US economy, but the wild car is Trump’s stance on free trade. Trump’s policy proposals for lower regulation and lower taxes could be highly stimulative to the US economy. The biggest uncertainty for future economic growth relate to his trade policy and whether Congress will be able to temper the more extreme aspects of his proposals.
Before I get into today’s topics, I think I speak for most Americans when I say that we are relieved that this election will finally be over late tonight or early tomorrow. This has been the ugliest and most embarrassing election in most of our lifetimes.
The possible election results are not binary. There is a wide range of possible outcomes, listed below from bearish to bullish. Please note that I am not opining about who I want to win or how you should vote. I am reporting how the market will probably react under differing circumstances, with some references for you to start your own research.
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.
As of October 27, stocks are up more than 6 percent year-to-date. Although slightly below the average, this is much higher than returns in the last two election cycles when a new president had to be selected: In 2008, the market plunged nearly 40 percent; in 2000, it ended down 9 percent.
At the three-quarter pole, the global economy is muddling through a disappointing 2016. Growth in developed and emerging markets continues, but at a pace that has fallen short of expectations.
The Congressional Budget Office has estimated that in the fiscal year ending September 30, 2016, the U.S. budget deficit jumped to $590 billion, compared with $438 billion in the prior fiscal year. However, over the same time period the change in total gross federal debt surged upward by $1.4 trillion, more than twice the annual budget deficit measure.
Understanding asset class correlation patterns is key to understanding true portfolio risk factor exposures and the embedded assumptions that inform investment decisions.
We have normal week for economic data, including the first estimate for Q3 GDP. There are also important earnings reports. Election stories have become even more intense. Meanwhile, the market has been pretty quiet.
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.
Today we’ll look at the remarkable results the Cleveland Clinic has already achieved with its 100,000+ employees and dependents and with numerous corporations they work with. They are making people healthier and reducing medical costs. It is a model that I think could work on a much broader scale.
There are concerns that political differences could again re-emerge in Thailand that have in the past been destabilizing. However, in our view, the backdrop to a royal succession has improved drastically in recent years.
Companies in the consumer-related sectors and information technology are particularly attractive to us in the current environment, especially as technology is becoming more integral and competitive in emerging markets.
We have normal week for economic data, and a big week for earnings reports. The last Presidential debate will grab headlines. We have been monitoring these factors for weeks, but something new is showing up in the data.
This week we are going to look at the US healthcare system, not simply to critique Obamacare, but to explore the deeper problems. Warning: this letter will print much longer as the latter half of the letter has a lot of charts and graphs.
Arnold Palmer! Well done our wonderful friend, well done. And welcome home!
