2017 started with stocks climbing, bonds falling and the U.S. dollar
strengthening in the belief that the new administration would accelerate
economic growth via tax cuts, regulatory easing and infrastructure
spending. But by quarter-end, the so-called “Trump bump” was giving way
to a “Trump slump” that had undone much of the momentum for the various
As our portfolios head into the second quarter of 2017, little has
changed from where they stood at the end of last year. We continue to be
positioned for an upswing in stock market volatility, given high
valuations and the many uncertainties, both domestic and international.
Recent stock market volatility surprised some investors who’ve enjoyed
the S&P 500’s roughly 9% rise since Election Day. We’re looking at two
things — Trump administration initiatives and corporate earnings — as we
consider the stock market’s future, but a little volatility isn’t a bad
thing, as long as you take a long-term approach to investing.
Municipal bonds appear attractive after last week’s fed funds rate hike,
but they still face some uncertainties with possible tax rate and policy
changes from the Trump administration. This could create some volatility
for munis—and also some opportunities.
The oil market was in a deep funk leading up to this week’s Fed meeting,
but new numbers that came out Wednesday helped it gain back some lost
ground. Now, it’s trying to determine the market price that brings
supply and demand into equilibrium.