First things first. As we head into the final leg of the 2016 U.S. general election that has seen vitriol and tangential issues (personality and peccadillos) elevated to what were previously unimaginable levels, we repeat our previous admonition: THERE IS ABSOLUTELY NO INCENTIVE TO HOLD ANY INTERMEDIATE-TERM MARKET POSITIONS INTO THE U.S. ELECTION THIS TUESDAY.
Next month’s election is the first since the Federal Reserve ended Quantitative Easing (QE) efforts. But it’s clear that monetary policy and the Fed has taken the spotlight away from the candidates’ fiscal policies and plans for economic growth. This is the direct result of two major trends over eight years.
In a piece subtly titled “Institutional Investors are Delusional,” Meb Faber points out that the mean expectations in a poll of investors on net returns is 13%. That would require a gross return of 20%. Just 1% of more than 400 respondents (so just four people) are rational.
Ready or not, here they come.
Only four months remain before we find out who the next presidential nominees will be and a mere eight months before we elect one of them to lead the world’s largest economy.
The Pain is Spain will not let Brent crude oil prices gain. Brent crude prices hit the lowest level since 2004 as uncertainty over Spain’s election is raising further concerns about European and global demand. Crude prices continue to fall as rig counts rise and demand expectations fall.