Re: Rewards Out There 02 (Sep 09 - Dec 16)
Posted: Thu Jan 19, 2017 9:23 pm
Your Pre-Inauguration Market Briefing
by MICHAEL LEWITT
Source: Sure Money
http://suremoneyinvestor.com/2017/01/yo ... 5#deeplink
by MICHAEL LEWITT
Volatility is, of course, a two-edged sword. Trump’s policy decisions (whether considered or off-the-cuff) will drive some sectors up and others down. Here is what I think will happen to a few specific sectors’ prices:-
1. Financials should benefit from higher rates and lower regulation.
2. Defense stocks should benefit from more defense spending.
3. Technology should benefit from repatriation of offshore cash.
4. Energy should benefit from EPA restraint but will still be heavily influenced by the US Dollar and supply/demand.
5. Building and construction should benefit from infrastructure plans.
On the “down” side, some of Mr. Trump’s proposed policy changes would have huge consequences for some sectors.
1. A trade war would hit exporters big-time. Anything that diminishes global trade would be a huge deal and damage the global economy.
2. If Trump reduces or eliminates agriculture subsidies (something that is long overdue), that would hit specific stocks that make soft products (i.e. grains) and hard products (machines).
3. On a more general level, leveraged companies will be hurt by higher interest rates and if Trump can actually pull off reducing the deductibility of business interest expense, that would be a monumental change that would affect the housing market as well as how corporations finance themselves in ways that cannot be predicted but are likely to be unsettling.
Source: Sure Money
http://suremoneyinvestor.com/2017/01/yo ... 5#deeplink