|We are experiencing a “Trump Rally” on Wall Street. The S&P 500 is up +3.6% (total return) in the 2 ½ weeks since the 11/08/16 political upset, but even more impressive was the 4 new all-time closing highs set last week (in a Thanksgiving shortened 4-day trading week) by an index that has been in existence since 1957. The S&P 500 is now up +10.5% YTD through the close of trading on Black Friday (11/25/16), pushing the index above its average performance of +9.7% per year over the last 50 years with still 5 weeks of trading remaining this year (source: BTN Research).
If there is still doubt that the Federal Reserve is ready to raise short-term rates at its final scheduled meeting of 2016 (set for December 13-14), the enthusiastic reaction of equity investors to the results of the recent American presidential election has heightened expectations that the Janet Yellen-led Fed may act in 2 weeks. As of the close of trading last Friday, the bond market was showing a 94% chance of a rate hike at its final meeting of calendar year 2016 (source: Federal Reserve).
With the bond market now expecting Fed action on interest rates, the anticipated flow of money into US Treasuries is driving strength in the dollar, a result not without its own consequences. A stronger dollar not only impacts the sale of US products abroad (as more of the weaker foreign currency is needed to complete the purchase), but also translates into smaller profits for American multinational companies when their foreign sales are converted back into pricier dollars (source: BTN Research).
AWESOME, KEEP GOING – The S&P 500 has gained +285.4% (total return) from its 3/09/09 bear market low through the close of trading as of last Friday 11/25/16. This ongoing bull market is in its 93rd month. Only the 1990-2000 bull market that was into its 114th month before it peaked on 3/24/00 has lasted longer among the 11 bulls that have occurred in the last 70 years (source: BTN Research).
ELEVEN YEARS LATER – The median sales price of existing homes sold nationwide during the month of October 2016 was $232,200. The median sales price of existing homes sold nationwide during the month of October 2005 (i.e., 11 years ago) was $229,000 (source: National Association of Realtors).
ANOTHER YEAR, ANOTHER TRILLION – Our nation’s national debt was $18.922 trillion as of 12/31/15, a total that has reached $19.898 trillion as of Wednesday 11/23/16 (source: Treasury Department).
EVERY DAY – An estimated 9,900 Americans will turn 65 years old each day next year (2017). This group represents the 7th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).