Market Commentary, Week Ending February 21, 2017

BY TATE DEVITO

 

SUMMARY

As Trump continues to make moves as far as creating a political administration, white house dynamics shift and so too do economic outlooks. Relative market stability, with an underlying current of oil investment. Advancements in military technology and electric cars as something to watch.

 

MARKETS (AS OF 11/14/16; CHANGE SINCE 11/08/16)

Equities

  • S&P 500: 2,351.16 (+ .17%)
  • Nikkei 225: 19,251.08 (+ .09%)
  • FTSE 100: 7,299.86 (-0.0%)

Interest Rates

  • UST-10 Yr.: 2.42% (- .03% bps)
  • China-10 Yr.: 3.37% (+ .16%)
  • GDBR-10 Yr.: 0.2960% (- .01%)

Commodities

  • Gold (spot):1,283.80 (-.23%)
  • Oil (Brent):53.93 (+ .33%)
  • Live Cattle: 114.78 (+ 1.35%)

Currencies (app.: +, dep.: -)

  • € (EUR/USD): 1.06202 (- .11%%)
  • $ (USD/JPY): 133.376 (+.22%)
  • $ (USD/RUB): 57.8393 (- .05%)

 

ECONOMIC HIGHLIGHTS

Immigration to Assist in Detroit Recovery
Fighting larger trends on anti-immigration is the city of Detroit, who prides itself in holding the greatest Arab-American population in the country. Failing in education, and low per capita incomes, Detroit seeks help from diverse immigrants as a spin to get their economy back on its feet.

Speedy Arrival of Apple Electric Cars
Apple’s electric cars may be arriving sooner than you think. Covered in USA Today headlines is the fact that Google and Apple will stop at nothing to have electric cars on the road by 2019. As Google names a CEO for the electric car project, they lead the way in taking concrete steps to making this innovation a reality and life-altering change. (Interesting given Google position).

Poland in Response to EU
Monitoring of Polish relations in the EU may result in Poland losing voting rights in 28 nation EU. Apparent rise in danger of this vote loss seems widely dismissed by Polish officials in addition to Constitutional reevaluation (Reuters).

 

POLICY AND POLITICS

US Politics
Among other news, Trump begins re-election campaign by pouring dollars into rallies in Florida. Sparking media hype more than ever, many political issues are tactically clouded due to Trump’s newest spree. Trump also bashes judges who appeal Trump’s temporary travel bans, bringing up turmoil on immigration policy. 

  • Fake Numbers? - Additionally, Trump’s administration has been known to mock fake news, but at the same time is under scrutiny for doctoring economic numbers that could affect stocks. Lacking a single member on a council of economic advisers, and independence of cabinet secretaries thereof, many previous government workers are afraid of false statistics coming from the administration itself, and the consequences these effects may hold.
  • McMaster Named National Security Advisor - With Army General McMaster as a bipartisan military tactician by Trump’s side, political theorists argue a more long distance, technology driven future for the U.S. military. (Bloomberg). 

Notable outside US

  • Russian UN Ambassador Dies - Previous ambassador Churkin dies at age of 64. Known for a champion of sour ties with the Obama Campaign and U.S. in general, Churkin’s death falls in at a critical point during Trump’s plans to align with Russia. Whoever is next will be free of sullied ties to the U.S., and could be the fresh start that Trump is seeking. (Bloomberg)
  • Verify What You Spread” - Similar to the fake numbers write up earlier, Swedish Prime minister criticizes Trump’s speeches in Florida saying that as a politician he should take more care of the accuracy of his facts (Bloomberg).

 

INVESTMENT IDEA

Tech/Military Crossover – Not just due to McMaster’s appointment, but also increasing military size and relations suggests potential necessity of development of military technology (ex. Harris Corporation). I believe a good holding period would start now and extend a few years. What would be truly interesting is if every day developments such as electric cars adapted to military demands, suggesting potential holding well through 2019. 

 

WHAT TO WATCH

Political Administration – Especially with Military and Economic Circles, it seems as though Trump still has a ways to go in forming the rest of his political administration. Economic Advisors, are, as noted earlier, in desperate demand. In checking news today, McMaster’s appointment was released mid-day; this information is coming readily and unpredictably.

Russian Recovery – Follow up from Churkin’s death, and recovery of Russia in the UN could be critical to U.S./Russian relations, and is something Trump and Europe will be focusing on.