by Douglas Drabik, Fixed Income, Raymond James
Twas the week before Christmas, when all through the market
Not any data releases were stirring, at least enough to spark it.
The ballots were counted by the chimney with care,
In hopes of stimulating the economy with more than a prayer.
The investors were nestled all snug with their money,
While visions of higher yields danced and portfolios looked sunny.
And Yellin with her committee, and I in my analysis gift wrap,
Had just settled our brains for the Christmas breakās nap.
When out around the globe there arose a clatter,
We sprang from our chairs as rates were a scatter.
Away to the U.S. money flew in like a flash,
Keeping the headwinds on rates and mattresses stuffed with cash.
The moon on the breast of new higher rates,
Tore open the height of equities and asset-class weights.
When, what to my wondering eyes should appear,
The dollar is screaming, corporate profits do fear.
When an out-spoken driver, so lively and quick,
Investors knew in a moment that Trump was the pick.
More rapid than eagles his policies they came,
And he whistled, and shouted, and announced them by name.
Now, McGahn! Now, Mattis! Now, Priebus and McMahon!
On, Puzder! On, Price! On, Flynn and Bannon!
To the top of a strong dollar! To the stock market bull,
Now dash away! Dash advantage away! Dash away with yields getting full.
As dry leaves that before the wild hurricane fly,
When they met with an election, red states were high.
So up to the house, the senate, the oval office they flew,
With a sleigh full of republicans, and Trump too.
An then, in a twinkling, I heard on the hill
The prancing and pawing of each appointment to fill.
As I drew in my head, and was turning around,
Down the chimney Trump is coming with a bound.
He is dressed with promises, from his head to his foot,
And his policies may make some regulations go caput.
A bundle of changes he has flung on his back,
And he brings stimulus, trying to lift economic slack.
His eyes how they twinkled! His message so merry!
His campaign was like roses, to some it is scary.
Changes to the Supreme Court pending picks,
The Fed to change leadership, part of the mix.
The Trump of a pick held tight in Americaās teeth,
And the changes encircled like a Christmas wreath.
He has a bold plan to make America great,
Pre-inauguration market results seemed thrilled with the fate.
The headwinds still swirl, so caution ahead with muddy clarity,
Central bank direction, the dollar and interest rate disparity.
Stimulus takes time to affect GDP,
Rates may inch up but slow like the growth of a Christmas tree.
Donāt sway from the portfolio plan, keep asset-class smarts,
Cash flow, income and stated maturities for healthy investor hearts.
As we end the year with optimism at a peak,
āMerry Christmas to all, and to all a good week!ā
Copyright Ā© Raymond James
