Market Report - November 14, 2016

Written on the 14 November 2016

Market Report with Paul Wareing from Barclay Wells Ltd

Well, I think it would be fair to say that the markets called the US election wrong on two fronts. Firstly , believing that a Trump win was barely plausible and secondly if it did happen the markets would go into free fall. Neither eventuated and the Dow Jones went on to record highs!

It seems that now the dust has settled,  markets are particularly excited about fiscal stimulus through tax cuts and increased spending on defence and infrastructure . This is helping construction and defence related stocks while  Trumps' other economic policy, reduced regulation, is also bullish for financial and health care stocks.  Despite this feel good factor I still feel that  US equities overall remain challenged by still-high valuations and sluggish corporate earnings.  There's still almost ten weeks until Trump moves into the White House so I'm sure there'll be many more sound bites from the Donald, and who knows maybe even a policy or two?

In local markets last week,  the S&P/ASX 200 was  up nicely and Trump's victory, along with China's high PPI result, also provided another excuse for iron ore prices to rally further!   We have a speech from the RBA Governor on Tuesday and unemployment numbers on Thursday but I think it unlikely that anything  will change the outlook for interest rates, with attention focused on the US and Trump.

At present investors are moving away from local defensive yield plays (like listed property) in light of higher bonds yields and switching their attention to the financials for those still seeking yield.  Resources are naturally still strong in light of the proposed infrastructure investment  but I get the feeling that the market has latched onto the infrastructure theme as it wants to believe in something after so much uncertainty. So, i still anticipate volatility and look to the US to see how things will play out .

Have a great week !!

Paul Wareing
Investment Adviser
Barclay Wells Ltd
41 Carnarvon St , Broome
0411 809 104/Email - paul@barclaywells.com

Disclaimer
In accordance with Section 949A of the Corporations Act 2001 Barclay Wells Limited advise that information on this website contain general financial advice only. Wells Limited did not take into account the investment objectives, financial situation and particular needs ('financial circumstances') of any particular person. Accordingly, before acting on any advice contained in this site, you should assess whether the advice is appropriate in light of your own financial circumstances or contact your Barclay Wells Limited adviser. Barclay Wells Limited, its Directors employees and advisers may earn brokerage or commission from any transactions undertaken on your behalf as a result of acting upon this information. Barclay Wells Limited, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly, from client transactions. Barclay Wells Limited believe that the advice herein is accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained in this publication and no responsibility for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence), is accepted by Barclay Wells Limited or any officer, agent or employee of Barclay Wells Limited.