CPC Investment Quarterly

Consolidated Planning Corporation | Raymond James | Atlanta, GA

From the

CPC

Investment Committee

Quarter 4 2016 Investment Quarterly

A post-election case study on how the markets price securities.

If you strip away the politics and emotions from the recent election of Donald Trump as the 45th president of the United States of America, you are left with an intriguing case study of how markets price securities.  For months, financial news experts and the markets themselves were touting a disaster scenario if Trump were to win the presidency.  On election night, the Dow Jones futures market dropped 750 points and the S&P circuit breakers tripped to halt trading after falling more than 3%.  Yet, the next morning markets pushed higher and have continued to do so.  What led to this reversal and why were markets fearful of a Trump presidency in the first place?

 

The answer is that market participants are seeking to price in what will likely result from a Trump Presidency.  Market participants are discounting isolationist policies, such as "ripping up NAFTA", as unlikely. This type of policy may be negative for markets as reductions in trade would harm most businesses earnings. However, markets are taking tax reform for individuals and corporations as a big positive for company earnings.  Markets are expecting Trump's tax agenda to likely pass with a Republican majority in the legislature and thus, should be priced into securities.

 

This month, CPC Investment Committee member Adele Gipson explored the implications of Trump's fiscal agenda.  We invite you to click here to view her video.

 

As with any new Administration, our team at CPC will stay on top of legislative changes that could impact the economy, markets, and our clients' tax situation and adapt accordingly.

 

As always, if you have any questions we can be reached at 404-892-1995.

 

 

The CPC Investment Committee

 

 

 

 

Any opinions are those of Adele Gipson and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.  Diversification does not ensure a profit or guarantee against a loss. Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss. Past performance may not be indicative of future results.

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Consolidated Planning Corporation is independent of Raymond James. Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

Consolidated Planning Corporation | Raymond James | Mike Hines | Atlanta, GA
Consolidated Planning Corporation through FINRA's BrokerCheck.
Consolidated Planning Corporation through FINRA's BrokerCheck.