by Greg Valliere, AGF Management Ltd.
WE HAVE AN EXTREMELY EARLY FLIGHT THIS MORNING, so here’s a very quick take on yesterday’s circus . . .
FURTHER PROOF THAT THE HEARINGS are a waste of time: no opinions were changed yesterday, none. The Democrats feel they have overwhelming evidence of impeachable offenses, while the Republicans are loudly calling the probe a sham. This impasse won’t change; the hearings didn’t move the needle one bit.
OUR FOCUS CONTINUES TO BE ON THE MARKETS, where there was a remarkable outcome yesterday: on the first day of impeachment hearings, the Dow Jones Industrial Average closed at an all-time high. The markets correctly anticipate no more than three or four Senators would vote to convict in a trial; at least 20 GOP defectors would be necessary to oust Donald Trump.
THE MARKETS IGNORED ROBERT MUELLER, and they’re ignoring the impeachment hearings. The stock market has surged by nearly 20% this year despite all of the dysfunction in Washington.
THE GREATER MARKET CONCERN is the China trade war, where the President’s narrative seems to change daily. News overnight of weak Chinese economic data confirm the damage done by the trade war, so we continue to expect completion of Phase One before more tariffs are scheduled to rise on Dec. 15. But negotiators still can’t agree on how many tariffs will be lifted, and Trump’s mixed signals on trade are more negative for the markets than the impeachment brawl.
MEANWHILE, FED CHAIRMAN JEROME POWELL made it clear yesterday that there won’t be a rate cut at the Fed’s next FOMC meeting, on Dec. 10-11. The vitriolic anti-Fed tweet-storm from Trump will then intensify, and we anticipate leaks during the holidays that Trump is seeking a path toward firing or demoting the beleaguered Powell.
OFF TO THE AIRPORT . . .
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2019 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
