A new year is upon us as January brings in new political leadership lead by President Trump and a new set of economic and political uncertainties. Though there are many people that are scared, we do not foresee a doomsday scenario but rather an opportunity for the new administration to enhance the economic welfare of the US. They are our biggest trading partner and with Trump focusing on ripping up NAFTA (North American Free Trade Agreement) it has everyone wondering what will happen with our partnership. So far, it seems that most of the plight is directed towards Mexico due to their massive wage inequality.
It was an eventful 2016 with many investors worrying about the state of the market in January and then absolute bliss post-Trump election. We will review this year’s top stories and what impact it had and could have in the future.
Some memorable events in 2016 were…
- China’s manufacturing triggering a mass worldwide sell-off in early 2016.
- The infamous BREXIT where the majority of the United Kingdom decided to leave the European Union.
- An underdog celebrity candidate became the next elected U.S. President and which promises vows to keep.
- Oil’s recovery and OPEC providing a glimmer of hope to capping production after a disastrous 2015. Lastly, the vote of confidence from the Federal Reserve in the way of raising rates by 0.25% round-up our major headlines.
Market Review for September 2016
Oil Increase Trump’s the Market
This month felt like I went to a water park, but instead of excitement, the only thing that was open was a lazy river as not much happened in the way of volatility in the global markets this month, in a traditionally underperforming September. Canada’s economy rebounded recently as exporters saw improving sales and our trade deficit decreased again for the 2nd consecutive month. But to highlight, Canada is still suffering from a poor economy for most of the year as employment has been the decline. The biggest news has to be OPEC’s decision to finally step in and cut production. We won’t know this for sure until November 30th when OPEC reconvenes and discusses all the details. Lastly, the Presidential debates occurred with the majority of critics stating that Hillary won the first debate with ease, often staying in line with her prepared message and just letting Trump derail himself. The memorable line had to be from Hillary, when she criticized Trumps economic plan by calling it “Trumped-Up Trickle Down Economics” in which she stated would only help the rich. Saturday Night Live had a great skit of this debate and we highly recommend that you watch it as Alec Baldwin’s performance as Trump is spot on. At the time of writing this, it can be found here: https://www.youtube.com/watch?v=Ukt2j4p_tv4. Looking forward, let’s hope the markets go upward smoothly and does not have Donald’s temperament which he call his “his strongest asset”.
Market Review for August 2016
The Markets Mimic The Olympics Minus The “Bolt”!
The Olympics came to an end this month and it had some similarities with the market. Records were being broken and new highs in the US were being achieved despite relatively light volume and empty seats at some Olympic events. Despite the lack of any economic drama, it was nice to have a boring month opposed to the volatility we have had over the past year. The economic numbers in August were generally good. Even when weaker numbers were reported (retail numbers) the market continued to view it as, “it’s not great, but it’s not bad”, which did not derail the continued upward trend. The combination of slow but steady growth, low interest rates, central bank policies, recovering energy prices and strong US dollar have been the magic recipe for the markets this year.