One Trillion Dollars Is Trump Change For the Markets

Posted on Posted in Views From The Hill

By J Clinton Hill, Capital Markets Strategist @ Hillbent.com

ETF Market Commentary

etf-commentary-equities-bonds-currencies-commodities-real-estateToday, CNBC reported that the combined increase for the SP-500 Large-caps, SP-400 Mid-caps and SP-600 Small-caps has been over $1 Trillion since the US  2016 presidential election. That’s not chump change gentle readers. That’s Trump change!

Oh well, I couldn’t resist the pun and these days find myself challenged to continue commenting on what I regard to be a fundamentally overbought market, despite the technical trends being bullish. What concerns me most is the divergence in market fundamentals and technicals. A moment of clarity can happen in a heartbeat and, when it does, make sure you have buckled your chinstrap and seatbelt.

Then again, hope springs eternal and the forward and upward spring in the market is based on hopes of tax cuts, infrastructure spending, and other pro-economic growth measures. The other side of the coin with a gamble on Trump is uncertainty. Yet, Trumpism is “yugely” bigger than Trump. It is my opinion that he merely represents the oscillating sentiment of backlash against globalization.

Therefore, Donald is not the lone ranger of trade protectionism. Look to England’s Brexit and the election landscape of Europe for more clues and accomplices. If these are not enough, then there is also the stinging whip of the dragon, which is China’s potential retaliatory response to foreign trade policies and geopolitical flirtations with Taiwan. Provocation of a sleeping giant is not wise and could also make the world tremble.

Oh well, at the moment, it makes no sense to fight the tape of a technically strong bull market as evidenced by new highs on the SP-500 (SPY), Dow-30 Industrials (DIA) and Russell-2000 (IWM), while the Nasdaq-100 (QQQ) recovers and attempts to test its on previous records. It’s an interesting time to be an investor. Enjoy the punchbowl at this party but don’t imbibe too much hubris. Rather, be mindful that our new fearless leader does not drink at all and that he has also sold all his stocks since June 2016 so he can operate freely negotiate policy decisions absent of conflicting interests.  😉

(Please refer to our ETF summary table below for a performance analysis of asset classes.) 

 


ETF Performance

 

RS 1Yr Exchange Traded Fund Last Chg % Chg
Equities
100 DJ-30 Industrials (DIA) 195.48 2.99 1.55%
100 SP-500 (SPY) 224.60 2.90 1.31%
95 Nasdaq-100 (QQQ) 118.36 1.48 1.27%
99 Russell-2k (IWM) 135.90 1.31 0.97%
79 EAFE (EFA) 58.52 0.86 1.49%
80 Emerging Mkts (EEM) 36.20 0.60 1.69%
58 Europe FTSE (VGK) 47.75 0.64 1.36%
76 Latin America 40 (ILF) 28.40 0.39 1.39%
75 Brazil (EWZ) 33.28 0.60 1.84%
6 Japan (EWJ) 50.52 0.74 1.49%
93 Pacific Ex-Japan (EPP) 41.88 0.54 1.31%
87 FTSE China 25 (FXI) 37.69 0.43 1.15%
1 VIX Short-Term Futures (VXX) 26.22 0.07 0.27%
     
  Major Equity Sectors  
100 Consumer Discretionary (XLY) 84.12 1.60 1.94%
48 Consumer Staples (XLP) 51.51 0.73 1.44%
99 Energy (XLE) 75.95 0.60 0.80%
78 Financials (XLF) 23.48 0.36 1.56%
39 Healthcare (XLV) 67.89 -0.59 -0.86%
100 Industrials (XLI) 64.05 1.17 1.86%
100 Materials (XLB) 51.15 0.72 1.43%
39 Real Estate (XLRE) 30.83 0.63 2.09%
98 Technology / Info (VGT) 121.68 2.11 1.76%
88 Telecom (IYZ) 33.63 0.93 2.84%
51 Utilities (XLU) 47.38 0.61 1.30%
     
  Bonds & Fixed Income  
11 20+ Yr Treasury (TLT) 120.40 1.02 0.85%
16 Aggregate Bond Fund (AGG) 108.37 0.28 0.26%
52 Treasury Inflation Protection (TIP) 113.43 0.10 0.09%
38 Investop Corp Bond (LQD) 117.13 0.49 0.42%
91 High Yield Corp Bond (HYG) 86.46 0.43 0.50%
22 Pimco Intermed Muni Bonds (MUNI) 52.69 0.39 0.75%
31 High Yield Muni (HYD) 29.58 0.32 1.09%
     
  Currencies  
81 US Dollar Bullish (UUP) 25.90 -0.08 -0.31%
21 Euro Trust (FXE) 104.60 0.44 0.42%
35 Japanese Yen Trust (FXY) 84.83 0.22 0.26%
     
  Commodities  
93 DB Commodity Index (DBC) 15.49 -0.12 -0.77%
38 Gold (GLD) 111.83 0.40 0.36%
72 US Oil (USO) 11.09 -0.20 -1.77%
     
  Real Estate  
56 DJ Real Estate (IYR) 76.99 1.47 1.95%
83 DJ Home Construction (ITB) 28.55 0.69 2.48%
41 Residential Real Estate Index (REZ) 61.08 1.23 2.06%

 

Signing off @ Hillbent…

 

(For more a more detailed and extensive coverage of ETFs, please refer to our premium research service, ETF LookOut Points.)

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