Hump Day Takeaways


It’s hard to discern through all the media coverage of the upcoming Trump administration –what a disaster for the House on their first day! — what is actually going on with the markets.  We have received a litany of new data, particularly centering around the industrial complex.

  1. Inflation, manufacturing, and other key economic was released and it looked great.  When looking at credit spreads, the data shows that we could be as far as FIVE YEARS away from the next contraction, making this the longest business cycle since the 1950’s.  Investors should look at this as opportunity to get in on this overbought market.
  2. The first steps to repealing the Affordable Care Act were put in place.  This makes any stock tied to health care particularly uncertain.  Pharmaceutical companies face other headwinds with President-elect Trump targeting companies who have engaged in inversions to move their domiciles overseas.
  3. President-elect Trump also continues to rail against the Intelligence Community, which makes defense stocks (which typically grow under Republican administrations) similarly uncertain.  If Trump indeed changes the functions of the Intel agencies, there is no telling how the Pentagon will change their procurement strategies for the military.

The key is to continuously gather information and pounce upon opportunities to come your way.  This means getting your choice brokerage ready, setting aside the money, and letting your eyes, ears, mind, and gut lead to way to real purchases of companies and indexes.

-Joe

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