Good morning!
In the 2 months since the 11/08/16 presidential election, the S&P 500 has gained +6.8% (total return), including +1.8% last
week, the first trading week of 2017. Time will tell whether the Republican-controlled Congress can deliver on its campaign
promises of tax cuts and a rollback of unnecessary regulations, but the corporate world has reacted with confidence to the
upcoming change in the White House. President-elect Donald Trump’s nominees for Secretary of State, Commerce and Labor
have a combined 54 years as president or CEO of American businesses (source: BTN Research).
Both the House and Senate reconvened last Tuesday (1/03/17). The House welcomed 52 new members while the Senate has
7 new members. The average years of service in the House is 9.3 years, just short of the 10.1 years of average experience for
senators. Republicans began the tedious work to “repeal and replace” (or “repeal and delay”) the Affordable Care Act.
Drafting and passing a substitute for the controversial healthcare law will prove to be far more difficult than repealing the law
(source: BTN Research).
US employers hired +156,000 new net workers in December 2016, bringing the annual total to +2.16 million new hires for the
entire year. Our nation’s unemployment rate ended last year at 4.7%, down from 5.0% a year earlier. The percentage of
Americans that are unemployed or are working part-time while seeking full-time employment dropped to 9.2%, down from
17.1% at year-end 2009 (source: Department of Labor).
Notable Numbers for the Week:
1. WHOOPS - University of Pennsylvania professor Jeremy Siegel said he “wouldn’t be surprised to see a 1,000 point drop
on the Dow” following Donald Trump’s victory on 11/08/16. Instead the Dow has gained +1,631 points since the election
through the close of trading last Friday 1/06/17 (source: BTN Research).
2. STRONGER DOLLAR, WEAKER EURO - 19 of 28 economists (68%) polled in late December 2016 believe that the Euro will
“hit parity” with the US dollar during 2017, i.e., 1 Euro will equal 1 US dollar, the result of rising US domestic interest
rates. The Euro was equal to $1.0581 as of 12/31/16 (source: FT).
3. STRAIGHT LINE – Just 25% of stock investors were “bullish” on the US stock market on 12/31/15 after the S&P 500 had
produced a +1.4% gain (total return) for 2015. The S&P 500 gained +12.0% during 2016 (source: AAII).
4. CAMPAIGN RHETORIC? - Our nation’s economy will begin its 91st month of growth this week, an expansion exceeded in
length only 3 times since 1900. President-elect Trump predicted on 4/02/16 that the US is on course for a “very massive
recession” because the country is “sitting on an economic bubble” (source: Reuters).
01/09/17 Monday
Investment advisory services offered through Private Capital Group, LLC, a Registered Investment Advisor.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is
based on data gathered from what we believe are reliable sources. It is not guaranteed by Private Capital Group, LLC as to accuracy does not purport to be complete and is not intended to be
used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The indices mentioned are unmanaged and
cannot be directly invested into. Past performance does not guarantee future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative
of the US stock market. Copyright © 2014 Michael A. Higley. All rights reserved
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