Wednesday, November 23, 2016

Thoughts: Happy Thanksgiving!

The stock market has been straight up since the election.  This seems to fly in the face of what the media keeps shouting about since the nation voted Mr. Trump as the next President of the United States.  Here are my thoughts on what we're seeing.

The press and much of America has been caught off-balance by Mr. Trump's win.  Having failed to have seen this possibility the national establishment press will give him no quarter in the early going.  There will be no honeymoon for the new Trump Administration.   This resolve from the press seems to be hardening since Mr. Trump seems to be in no mood to kowtow towards them.  Expect the majority of the news out of the New York-Washington corridor to at a minimum be skeptical and for the most part negative.  This is not a political call but a bow at reality.  They will continue along this vein until they see it does not work.  If the Trump Presidency gets off to a decent start then expect some organization to break ranks and tack more towards the center in its reporting.  I would peg Chuck Todd at NBC for this roll if Megyn Kelly over at Fox News doesn't get there first.  Remember this when you wonder why the market rally on what will be perceived as negative news in the papers or on TV.  Again I am coming at this from how financial markets will view the world and not how political pundits want to posture on TV or on Twitter.

Markets have rallied because they expect positive economic developments in the next two years in the forms of renegotiated trade deals, changes to the tax code, repatriation of US corporate dollars from overseas, some sort of infrastructure spend and less regulation for business.  They are also rallying because President Obama is going to turn over a pretty decent economy to President-elect Trump come January.  We have said time and time again over these past few years that things are getting better.  The economic statistics show this.  Almost by every definition from low unemployment figures to robust housing sales, positive consumer sales, an uptick in wages low inflation and low interest rates the US economy is doing ok at the moment.  Even rising interest rates can be viewed positively as an example of an economy that is more on the mend today than it was even a year ago.  It is not perfect, it never is, and there a blemishes out there.  However, President-elect Trump is going into a much better economic situation than what waited for President Obama eight years ago.  Stocks reflect that as well.  The S&P 500* is up over 170% since President Obama took office.  All the nay-saying can't ignore that fact.  President Obama made some mistakes.  He probably went for the wrong health care deal for example.  But he did steer the the US economy through probably the worst economic environment since the Great Depression.  If we are going to blame him for his mistakes then let's give him credit for his accomplishments as well.  Mr. Trump will inherit this base. Only time will tell if he builds on it effectively.

And finally, contrary to what you may read at other places or see on TV, I believe that we as Americans have much more in common than what we perceive as our differences.  We may not agree on the best way to get to certain places but I believe we all for the most part want to get to the same destination.  It is my hope that we remember that in the coming months and years.  Tomorrow is Thanksgiving.  It is the most American holiday with traditions that extend as far back as the first European colonists and was thrust onto our national consciousness by President Lincoln during our most terrible of wars.  No matter how you feel about the election, and in particular if you are feeling negative or scared remember if we can live through and recover from our Civil War then we'll probably get through this.  Whether you are elated about the election results or depressed or perhaps even indifferent then know through whatever lens you view the outcome, America has dealt with better or worse Presidents and survived.

Whatever we are or whatever we feel, tomorrow in some manner it is my hope that each and every one of us can give thanks for something.  It is my hope that you are surrounded by family or friends sharing a moment of good cheer.  In that vein I wish you the happiest of Thanksgivings.  Leave the politics aside for one day.  Don't worry about the markets or your portfolios, stocks will still be there on Monday.  Eat too much, be merry, enjoy loved ones and give thanks.

We are back early next week.

Peace and God bless to you all.  Happy Thanksgiving.

*Long ETFs related to the S&P 500 in client and personal accounts although positions can change at any time without notice or dissemination on any other form of electronic media.


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