Tuesday, January 3, 2017

Entering the World of Trump

Tuesday, January 3, 2017 - The year 2016 was one that defied expert predictions from the expected Federal Reserve rate hikes, rises in energy, company bankruptcies, oil prices to the outcome of the Brexit referendum and the surprise upset of Donald Trump winning the US Presidency.

With lingering clouds in Europe, including bank insolvencies in Italy and the upcoming elections in both Germany and France, as well as the inherent challenges that the new President-Elect will encounter after January 20th, 2017 promises to be a riveting year fraught with many potential bumps that could derail the Trump rally.

Despite 2016 starting on a rough road in Q1 with the S&P 500 being down over 9% by mid-February, the equity index rallied to end the year up with a total return of at 9.79%. With oil prices stabilizing, housing prices up, increasing consumer confidence, the rally in stocks seems likely to continue despite headwinds from a strong dollar. The US Bond Market is likely to remain choppy as the markets revalue interest rates and various types of fixed income instruments under a Trump Economic Reflation Strategy.

Looking at our ETFG Quant List, we see significant percentage gainers in increases for Russian Equities ERUS as well consumer staples with VDC, KXI, FXG and PSCC.   Interesting HUSE – the US Equity Rotation Strategy ETF moved up over 27% last week.  On our Behavioral scores, JDG, JPN, HAHA and EEMA reflecting Japanese equities, benchmark China CSI 300 and the iShares MSCI Emerging Markets Asia ETF respectively moved up as well. Consumer and Asian ETFs also moved up in our Fundamental Ratings. Investors however should keep reserves to be prepared to take advantage of any “Black Swan” Events.

We wish all of our readers a Happy, Healthy and Prosperous New Year - thank you for reading ETF Global Perspectives!

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