Camelot Portfolios Talking Points

The Day After

In one of the wildest elections in United States history, the people elected Donald Trump as the 45th president. By no means was this even predicted by many in the media, and capital markets on Monday and Tuesday were moving towards a Hillary Clinton presidency. Other major points in the 2016 election are the House of Representative and the Senate will continue to be under Republican majority. As all of the votes are counted, this will be the first time Republicans have held both houses of Congress and presidency since 2005. 

Source: Real Clear Politics (as of November 09, 2016, 10AM EST)

Predictions on what a Trump presidency will look like are difficult, but there is an economic outline looking at Trumps ideas and people around him. Ultimately, it will take time beyond the first 100 days from what he outlined in his address in Gettysburg. Economic positives will likely come from deregulation, but what type of deregulation outside of energy and infrastructure is for the lawmakers to decide.

The day after an election is uniquely American. You will not see blood shed by the factions who make up the electorate. You see civility on both sides, and I believe that millions of Americans understand there is a future beyond the second Tuesday in November.

Unemployment Rate Stays Level, BOE continues QE

Beyond the major spectacle of the US elections, there was actual news which statistically shows the direction of domestic and global economics. The Bureau of Economic Analysts reported unemployment rate in October was holding steady at 4.9% (Bureau of Labor Statistics). The concerning part of the jobs report is the continual decline in the labor market which reported a decrease by 10 basis points (Bureau of Labor Statistics). This pattern in the labor force is largely a combination of discouraged workers leaving the market as well as baby boomers retiring (Bureau of Labor Statistics). Patterns may start to shift in the future for an uptick in unemployment with many discouraged manufacturing workers optimistically looking for jobs.

Outside of the United States bubble, the Bank of England decided to continue quantitative easing and prolong open market rates at .25 percent. QE will continue to purchase assets at roughly £3 billion in UK government bonds and buy roughly £.7-1 billion in corporate bonds (England). All of this effort is in part due to the Brexit in the summer and the policy by the central bank to raise inflation to 2 percent. In the remarks by Governor Mark Carney, “demand and output are stronger and citizens are looking past Brexit (England).” Currently, UK inflation has grown from .6% to 1% year over year in September (Trading Economics). With the upward projection in inflation and GDP for UK, it may make for a difficult decision by the BOE to continue monetary stimulus if this pattern continues to strengthen.

 

Compiled by the Camelot Portfolios Investment Committee

Darren Munn, CFA, Chief Investment Officer

Sarah Berndt, Portfolio Manager

Eric Kartman, Research

Drew Steinman, CPA, Trader/Research

Frank Echelmeyer, MBA, CKA®, Advisor Consultant

-for Broker/Dealer and RIA use only-

References

Bureau of Labor Statistics. Local Area Unemployment Rate. November 2016. 2016.

England, Bank of. Market Notice. 4 Nov 2016. 2016.

Trading Economics. UK inflaction rate. Nov 2016. 2016.

US Bureau of Economic Analyst. Press Release. 2016. 2016.

 

Disclosure

The materials presented is for use by professional advisors only.  It is not intended as informational and educational, and is not intended to be interpreted as investment advice.  The references to specific investment ideas, be they concepts, trends, sectors or even specific securities, are not recommendations for any advisor to adopt for any of their clients.  No investor or client reading these materials should view them as investment advice.  These materials are to be utilized as a catalyst for thought and discussion regarding the economy, investments, and responsible investing in general.  Past performance is not necessarily indicative of future returns, and there is no guarantee that any information presented herein will contribute to a profitable portfolio.  All facts referenced herein are derived from sources believed to be reliable. 

Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Camelot Portfolios LLC.  Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach.  Only your professional adviser should interpret this information. A302