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Positive foundation / backdrop

  • Strong job market

    • Historically low unemployment

    • Income growth rate growing

      • People investing and buying

    • Favorable access to credit

  • Low corporate tax structure

    • More globally competitive

  • Rising U.S. oil production

    • Larger safety net for country if politics interrupt oil imports from countries like Saudi Arabia

    • Increased revenues for domestic energy companies

 

 

Macroeconomic Market Report

Volatility Drivers

  • Political & trade uncertainty

    • Uncertainty of trade deal with Mexico, & Canada. USMCA deal signed on the last day of the month, Nov. 30th, but still not effective yet, must go through Congress

    • Uncertainty of trade tensions with China.

      • Xi Jinping and Trump agreed to a 90-day trade truce at a dinner after the G-20 summit in Argentina on Dec. 1st.

    • Over the next 90 days, American and Chinese officials will continue to negotiate lingering disagreements on technology transfer, intellectual property and agriculture.

  • Increasing bond yields

    • Indicates surge in volatility of broader stock market

    • In the past year, 10-yr note and 30-yr note have gone up surprisingly quick

    • Raises analyst worries of increasingly higher interest rates which could slow down economy

      • Slowdown in the housing market already evident

  • Rising interest rates

    • The velocity of rising rates

    • Worries of next years’ 4 rate hikes driving current uncertainty and volatility

  • Dismal earnings season

    • Retail’s poor performance

      • Lowered forecast for holiday season

      • Missed earnings for Q3

  • VIX Index

    • 18.79 as of 11/30/18

    • Ranged between 16.36 – 22.48 during the month of Nov.

Vix YTD

Vix YTD

VIX 5-yr

VIX 5-yr