Back to Blog Topics

Jim: Hi everyone today is Wednesday, November 2, 2016 and this is our weekly, midweek, market update call, brought to you each Wednesday to bring you current with observations, assessments and decisions we are making.

Today’s comments include some observations in the financial news as well as a review of our indicators that we work with to provide guidance for our portfolios.

But first here are some thoughts from Bernie on team and client matters, Bernie, what’s going on today?

Bernie: Jim – I wanted to take a moment to highlight the services that we offer – I think everyone listening is familiar with things like asset management, income planning and distribution, assistance with 529 plans, etc. However, I was reminded during one of our recent client meetings when we were talking about how we’re different from larger companies in the way that we handle certain services. The client said “I didn’t know that you did that”. This client has been with you for over 15 years – he was referring to mortgages. So, I wanted to take a moment to list some of the services/products that we offer that some of you may not realize or have forgotten that we have offer:

• Loans – mortgages, HELOC, Securities Based Line of Credit (SBLC), Insurance offered by Ramond James Bank
• Insurance – life (term, whole, etc.), long term care – traditional and asset based
• Trust services – thru our trust department
• Charitable gifting – Donor Advised Funds

Our goal is to help you in all areas related to your financial well –being throughout the different transitions you will experience along the way.

I’ll now turn the call over to Jim for his market comments…

Jim: Thank you Bernie.More details are building around the proposed takeover of Time Warner by AT&T.I mentioned that I wanted to review some of that story a week or so ago, and I am pushing it forward to a least next week as I haven’t completed all of my thoughts.

On my mind today is that I had hoped I could spend the time we do each Wednesday building up to the election NOT talking about the election, but it looks like I will break that today.Recent volatility in the stock market I think has been driven by a change in the polls within the past week.Like Brexit, which had pollsters aligned favorably towards the United Kingdom staying in European Union, as the polling results in the past 5 days have shifted to the other candidate, the markets begin to adjust accordingly.It’s my opinion that the markets follow what the investing public thinks the probability of one candidate winning over the other is.For some time, the polls have been leaning toward Clinton, in recent days; Trump’s numbers have gotten closer to almost create a statistical tie.A statistical tie—you may know—is if the difference is with what would be considered the margin of error, often somewhere around 2-3%.Since the odds may have increased for a Trump victory, the investing public has shifted their investments to reflect more what would be helpful in a Trump presidency.This volatility makes sense; if that’s the reason it has shifted.Quite honestly we never know what the dominant thought is in the marketplace, an activity mindfulness that is based more on luck than by fact.

Big stock groups of interest:The 3300 stocks on the OVER-THE-COUNTER market are showing more than 48% of those stocks have buy signals, making this the best of three groups to pick from.The NEW YORK STOCK EXCHANGE companies which are comprised of just more than 2100 stocks are pulling back as is the OPTIONABLE UNIVERSE GROUP of more than 3600 companies.This enables us to sit quietly to the side to allow matters to return to more positive opportunities, while still browsing possible trades in the OVER THE COUNTER MARKET.

Asset class rankings are same as last week:US Equities / Commodities / Fixed Income / International Equities / Cash then Currencies.As far as industry group rankings?Non-ferrous metals, Ferrous metals, Gaming, Aerospace airlines and Internet round out the top 5 of 40 different groups we follow.

Interest rates are bubbling up again.This morning the 13-week Treasury bill traded near the 35 basis point level.This would tee up the chart to go positive if it then goes to 40 basis points.The five year Treasury yield is 30% higher than it was at the beginning of August, just 90 days ago and looks like it is off to the races.Similar stories could be said of the ten and thirty year Treasuries.Those yields are comparable in change to the five year.I will say, for the first time since last year in September 2015, these yields are climbing in a healthy sustainable pattern.For further clarification on how we determine this OR for ways to take advantage of these changes outside of the market itself, please contact us in our offices.

Those are my thoughts for today, if there are any questions or comments for Bernie or me, I will now un-mute the lines and ask you to please speak up.

Raymond James & Associates, Inc., and your Raymond James Financial Advisor do not solicit or offer mortgage products and are unable to accept any mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified Raymond James Bank employee for your mortgage lending needs.

Opinions expressed are not necessarily those of Raymond James & Associates. The author's opinions are subject to change without notice. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.

Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security.

There is an inverse relationship between interest rate moments and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices rise. One basis point is equal to 1/100^th of 1%, or 0.01% (0.0001).

Commodities are generally considered speculative because of the significant potential for investment loss. U.S. Treasury securities are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value.

Back to Blog Topics