Blog : portfolio management

Jeff Voudrie’s Stock Market Commentary – The Trump Rally and Continued US & Global Growth 3-16-17

Jeff Voudrie’s Stock Market Commentary – The Trump Rally and Continued US & Global Growth 3-16-17

Jeff’s Stock Market Commentary: Continued US & Global Growth

Is The Trump Rally Over?

Summary: Although the US major stock markets are at or near all-time highs, the economic data signals continued US and global growth. My viewpoint is that we are still in the early stages of what could be a multi-year growth cycle.

If you listen to the talking heads on the business news channels it is likely that you will come away thinking that the market is overbought and on the verge of another crash reminiscent of 2000-2003 or 2008. As I talk with people (not my clients) I tend to hear the same thing—the markets are too high—then they talk about something like ‘valuation’. Granted, it is hard to argue that there is more upside potential ahead when the markets are already at all-time highs.

I distinctly remember making a similar argument in June and July of 2015 and back then the market drifted down throughout the summer and declined around 15% in August of that year.

So what makes it different now from back then?

The economic data.  In June of 2015 the economy was already starting to show signs of slowing after a multi-year period of growth.  As I’ve said in previous commentaries, my analysis of how to invest starts by looking at whether the economic tide is coming in or going out.

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Jeff Voudrie’s Weekly Stock Market Commentary – The Economic Climate

Jeff Voudrie’s Weekly Stock Market Commentary – The Economic Climate

The Economic Climate Has Changed and How You Should Be Invested

Each money manager and/or investor has a process that helps them determine when, how and how much to invest. The process that I use starts by looking at whether the United States and/or global economy is expanding or contracting.

In other words, I first try to determine whether the global and/or US economic tide is coming in or going out. In a growth-slowing environment, there is more risk than reward in trying to capture the return of the S&P 500. In a growth-growing environment, we want to more closely track the S&P 500 (or similar equity indexes) because that is where the best risk/reward equation is.

If the economic tide is coming in, then I want to be invested in stocks and bonds that act like stocks; if the economic tide is going out, I want to avoid most stocks and invest more heavily in bonds.

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Jeff Voudrie’s Stock Market Commentary: Trump The Chaos Candidate

Jeff Voudrie’s Stock Market Commentary: Trump The Chaos Candidate

Donald Trump the ‘Chaos Candidate’

Last week I read a book that referred to Donald Trump as the ‘Chaos Candidate’. What we have witnessed in the last two weeks sure fits the definition of chaos:

We have seen contentious nominee hearings.

We have seen Democrats boycott the hearings to delay votes, thus very few votes have occurred for his nominees.

The Republicans at the meeting in Philadelphia seem to be singing the same establishment tune they have been for months/years. (and that has resulted in low approval ratings)

Now we have a Supreme Court nominee where President Trump is already suggesting using the ‘nuclear option’ to get Gorsuch appointed. Doing so could possibly change the threshold of all future Supreme Court nominations.

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Jeff Voudrie’s Weekly Stock Market Commentary – March 18, 2016

Jeff Voudrie’s Weekly Stock Market Commentary – March 18, 2016

Jeff’s Weekly Stock Market Commentary: Global Slowdown  

Just last December, Federal Reserve Chairwoman, Janet Yellen announced that they were raising interest rates by 25 basis points because the economy was doing well. She also telegraphed (through their ‘dot plot’) that there would be additional 25 basis point increases at each of their meetings over the next two years. The market didn’t like that and bond yields actually went down on the news (making those of us invested in UST’s some money); and the stock market dropped roughly 12% between the announcement and February 11th.

Last Wednesday, the Fed blinked. They decided that the economy wasn’t strong enough to sustain another 25 basis point increase right now. Moreover, they (in the updated ‘dot plot’) signaled that the trajectory of any increases in the future would be slower and longer.

The stock market rallied on the Fed news of no interest rate on Wednesday. The stock market has been rebounding the last month ‘off the lows’ set on February 11th. Even after surging for over 3 weeks though, it is only back to where it was at the beginning of the year.

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