December 6, 2016

A Mixed View

After a three-week run where all major U.S. indexes posted significant gains, we saw a mixed view in the market last week. The Dow was up 0.10%, but the S&P 500 lost 0.97% and the NASDAQ was down 2.65%. The MSCI EAFE‘s measure of international developed markets also dropped 0.24%. Rallies such as the one we’ve experienced since Donald Trump’s election can’t go on forever, so we aren’t too concerned about these minor pullbacks. In fact, as we’ve recently said, when you look more deeply at the data, we see many reasons to believe that our economy is moving in the right direction. Good News This Week Positive economic news for the U.S. continued to come in this week, including reports that: Unemployment dropped again to 4.6% – hitting its lowest level since August 2007. Manufacturing increased for the third straight month. Personal income increased 0.6% in October. Q3 GDP was 10% higher than previously thought. Of course, despite the ongoing indications that our economy is doing well, everything isn’t perfect in the U.S. We’d like to see the economy growing even faster than it is. And while unemployment is low, the measure of people who are underemployed is still […]
November 15, 2016

A Week of Surprises

Last Tuesday, many Americans watched in great surprise as Donald Trump won our presidential election. Just that day, the New York Times had placed Hillary Clinton’s odds of winning at 85%, based on a range of state and national polls. But, like the Brexit vote this past June, 2016 seems to be the year of unexpected outcomes. As predicted, the markets initially reacted to uncertainty as they often do: with losses. Futures for the Dow, NASDAQ, and S&P 500 all dropped at least 4% in the middle of the night after Trump’s win. But come Wednesday morning, everyone was in for another surprise. Despite many predictions that the markets would sell-off if Trump won, all of the major U.S. indexes ended the week ahead. The S&P 500 was up 3.80%, the Dow gained 5.36%, NASDAQ increased 3.78%, and MSCI EAFE added 0.05%. The Dow even closed at an all-time high on Thursday and posted its best week since 2011, despite being slightly down on Friday. Needless to say, these two developments last week gave significant surprises for most people. Let’s look a bit deeper at the market’s reaction and what may lie ahead. Understanding the Rally The markets hate uncertainty, […]
November 3, 2016
big news headlines

Big Headlines Drive the Markets? – Weekly Update

Do big headlines drive the markets? At first glance, last week’s headlines may lead you to think that the markets are fluctuating more than they actually are. Yes, Hillary Clinton’s emails are in the news again (more on that below), but despite that surprise, the major indexes stuck to the same range-bound performance we’ve seen for the past three months. The S&P 500 ended down 0.69%, the NASDAQ was off 1.28%, and MSCI EAFE lost 0.44%. The Dow Jones Industrial Index eked out a 0.09% increase.   Three Key Events Last Week 1. FBI Announces Renewed Look at Hillary Clinton’s Emails What happened? On Friday, October 28, FBI Director James Comey sent a letter to Congress alerting them that the agency would be reviewing new Hillary Clinton emails discovered during their investigation of former Congressman Anthony Weiner. When news of Comey’s letter broke, the major indexes responded quickly-and negatively. For example, the Dow, which had been up 75 points, reacted with a nearly 150-point swing before closing about 10 points lower. What does this mean? The announcement threw a wrench in an already contentious and exhausting presidential race. Recently, polls showed that Clinton held a solid lead over Trump, and […]
October 18, 2016
2016 Election and the Stock Market

The 2016 Election and the Stock Market

Over the past few months, the election and the stock market are topics of discussion on everyone’s lips. Now we are less than a month away from the big day. Despite much debate regarding how the outcome will affect different areas, we have yet seen how it will affect the stock market. With the United States as a key driver of the global economy, the result is likely to yield a reaction. No matter which of the paths we take, we can be sure after the election things will look very different. Overall, we should see a huge impact on health care, taxes, federal regulations, immigration policies, and more in the coming years. However, before we make predictions regarding this election and the stock market; let’s see what effect previous elections had on the stock market and global economy. Which combination is best? According to history, the stock market performed a lot better when the incumbent party won the election. Regardless of which party is that retains the seat, the election results helped the stock market to stabilize. With this being said, there is a slight swing for Republican Presidents but nothing too noticeable. While the decision of who sits […]