Market Reports

Market Summary | November 2016

14th December 2016

The Author: David Cooper

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Financial strategist, investment adviser and Sales Director for United Advisers

Are we entering an era of ‘Trumponomics’?

We saw November markets react unfavourably when Trump was elected President. Since the initial drop, however, markets have reacted positively.

Strong US economic data means that the market is pricing a certainty of a Federal Reserve rate increase at their December meeting.

Dollar performance November Market Summary

This is similar to the reaction seen in UK markets following the Brexit announcement.

Market response to both these political events reinforces advice to investors about the need to remain cautious to knee-jerk reactions to such events.

Populist movements

In early December the Italians voted to reject the referendum called by Prime Minister Matteo Renzi; see the full results table here from Bloomberg.

This led to Renzi’s resignation, which now looks set to bring about more political instability across Europe. Dutch politician, Geert Wilders, founder and leader of the Dutch far-right ‘Party for Freedom’, welcomed the result, seeing it as a step forward for ‘populist’ forces across Europe.

Geert Wilders has, himself, contributed to the shifting political landscape. Mr Wilders is currently ahead in Dutch polls conducted in advance of national elections in March next year. This is despite receiving a criminal conviction for inciting discrimination.

The French political landscape looks likely to remain interesting. Republican candidate François Fillon is moving ahead in the French presidential election to be held in April 2017. Recent predictions forecast Fillon as likely to get to the second round against Marine Le Pen, Leader of the French National Front. The majority of 2016 political predictions have been incorrect. It remains to be seen whether accuracy will improve in 2017.

Oil price agreements

OPEC agreed to cut oil production in a bid to raise the ever-decreasing barrel price. At the end of November, Saudi Arabia led the pledge to remove 1.2 million barrels a day from global oil production. This led to an immediate 9% jump in prices with the barrel cost settling at $49.20 (source: CNN Money)

As part of our service, we offer a summary of our current market commentary; you can download the full report Market Summary | November 2016.pdf (248 downloads) . The full report includes commentary about Asia Pacific and Emerging Markets

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