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Nuveen Weekly Commentary January 2017

Posted by WrapManager's Investment Policy Committee

January 24, 2017

Investors Await Clarity on Tax and Spending Policies

Equity markets were mixed last week, with the S&P 500 Index down fractionally.1 Investors grew more wary about President-elect Trump’s increasing scrutiny of specific corporate policies and a possible push forhigher tariffs. The health care sector suffered due to drug pricing concerns, while retail sectors were hurt by generally disappointing earnings results.

Read an excerpt of the complete commentary below, or the entire weekly investment commentary as a PDF.

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Economic/Market Outlook Nuveen Asset Management Election Commentary Money Manager Commentary

What to Expect from the Markets Under President Trump

January 19, 2017
On January 20, President-elect Trump will become President Trump. If his campaign rhetoric plays out, we should expect many changes to government and the rules that govern business. Trump has vowed broad-based tax reform, a repeal of executive orders and a roll back of financial, healthcare, and energy regulations (amongst many other things).1 For investors, the election alone does not change the investment landscape – it’s about what happens next. No matter what your political views, it is important to stay attune to policy proposals that surface after the inauguration, and track their progress through the halls of Congress. If that seems like a lot to take-on, don’t worry – WrapManager is here to help! [+] Read More

Lord Abbett 2017 Global Investing Outlook

November 21, 2016
How Policy and Politics Shape the Global Outlook for 2017 As the dust settles from the U.S. presidential election, what might investors expect in the coming year? New U.S. leadership working with a Republican-unified Congress likely will have a meaningful impact on U.S. investment values, especially if legislation involving infrastructure spending, repatriation of U.S. corporate foreign cash, and tax reform become early priorities in 2017. Just as influential will be macro factors that weigh on global growth and interest rates. The uncertainties of the “Brexit” process, as the United Kingdom negotiates its separation from the European Union (EU), the related tilt toward protectionism in many nations, the pursuit of currency weakness by major non-U.S. economies, and continued “lower for longer” interest-rate policy should combine to support interest in U.S. investments. Differences between the U.S. economy and many advanced economies with regard to monetary policy, currency movement, and economic growth may define investor preferences among many asset classes in 2017. Here, we survey what 2017 may bring for major global economies—and key U.S. investment categories. Read on for a summary of their analysis, or view the entire document here. [+] Read More

BlackRock: Trump's Impact on the Stock Market

November 14, 2016
Donald Trump’s unexpected election win points to uncertainty ahead. Donald Trump’s unexpected election victory brings market and policy uncertainty in the short run. Trump’s agenda lacks detail and departs from the Republican Party tradition on trade, security and entitlements. Tapping into a backlash against the Washington status quo, he has often appeared at war with his own party and has surrounded himself with less-known advisors. We expect an initial sell-off in risk assets and flight to perceived safe havens. We see emerging markets as particularly vulnerable due to their reliance on exports and investor sentiment. We expect steeper yield curves and see health care stocks outperforming due to likely reduced regulation under Trump. Read on for an excerpt of Blackrock Investment Institute's commentary, or view the entire document here. [+] Read More

Blackrock: Impact of the 2016 Election on Investing

November 3, 2016
Unusually consequential election challenges the post-crisis status quo. The 2016 U.S. election campaign has been unique in many ways, but the underlying dynamics are not. These are partly driven by widening income inequality across the world, in our view, a trend that has accelerated after the financial crisis and subsequent policy responses. Related is a growing perception that the benefits of trade and globalization have only accrued to a few. Whoever moves into the White House will have to address these issues, and we could see fiscal expansion directed at improving infrastructure and measures aimed at redistributing prosperity. We expect similar themes and outcomes to play out in key European elections next year. Read on for an excerpt of Blackrock Investment Institute's commentary, or view the entire document here. [+] Read More

The Contrarian Nature of Bearish Forecasts

October 19, 2016
There seems this growing feeling that the market is on shaky ground. As an investor, you may feel it too: the presidential election is unique to the point of being wild, Europe appears to be in disarray, corporate profits have seen better days, GDP growth in the U.S. has been lower than average. Perhaps that is why a recent Bloomberg survey of forecasters said they expect the S&P 500 to finish the year 1% lower. They cited some of the concerns mentioned above, but also pointed to negative sentiment tied to rising interest rates, elevated stock valuations, and the aging business cycle.1 The question for investors is: is it time to rethink portfolio strategy, perhaps favoring a defensive posture? [+] Read More

JP Morgan Market Insights 2016: An Election of Extremes

October 17, 2016
JP Morgan Assets analyzes: Why economic angst has contributed to a frustrated electorate Why our base case of de facto divided government is what ultimately matters most for markets What history tells us about market behavior before, during and after presidential elections Why either a President Trump or Clinton will likely face a recession in his/her first term, and how investors should think about their portfolios given where we are in the economic cycle Read the entire market commentary here. [+] Read More

Lord Abbett: Implications of Presidential Candidates' Economic Policies

October 3, 2016
The S&P 500 Index has correctly predicted 19 of the past 22 presidential elections and every election since 1985... Amid unprecedented political polarization, lackluster growth, persistently low interest rates, and mounting geopolitical tensions, investors are grappling with allocation decisions as what may be the most contentious presidential election in their lifetime approaches. Politics aside, the next president will be pressed to boost growth, trade, innovation, and jobs in a slow economy transformed by globalization and technology. Note: The purpose of this special report is to help investors evaluate the potential investment implications of the presidential candidates’ most salient economic policies. It is not intended to take sides but rather to shed light on how, historically, markets and sectors have performed before and after past elections, and how various interests might be affected by current proposals, which might prompt consideration of the possible investment decisions to be made. Read on for an excerpt of Lord Abbett's engaging commentary, or view the entire document here. [+] Read More

The ‘Bear Market’ Chatter is Rising: What Should You Do?

September 8, 2016
If you’re starting to get the feeling that the mutterings of a next bear market are growing, it’s because in many senses they are. A recent Bloomberg article noted that some high profile market forecasters—among them Goldman Sachs and Bill Gross—were raising warning signs about rising stocks and bonds. [+] Read More

As A New President Rises, Will the Markets Follow?

August 16, 2016
The U.S. presidential election has capitalized the news media, social media, and pop culture for nearly a year now, and we still have several months before the campaign's end and the voters have their say. Here at WrapManager, we don’t take a political stance on elections, but we do track market trends and activity and the election environment can have an effect on the stock market. It’s interesting to look back at how politics have affected financial markets in the past. Though we can’t predict what might happen this time around, looking back can help us identify previous trends. [+] Read More