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Date: December 11, 2017
Global assets recovered from risk-off sentiment that took hold of global markets mid-week. The selloff saw a host of reasons, ranging from profit-taking to the continued drop in technology stocks. Trump administration is actively moving ahead with its campaign promises after months of hits and misses. Last week’s progress in US tax overhaul was a major milestone, which continued to buoy assets this week. Senate Majority Leader Mitch McConnell named eight Republican lawmakers to be part of the conference committee responsible for negotiating a final tax bill with GOP House lawmakers. It is planned to resolve differences between the two versions over the next two weeks.
Date: December 4, 2017
There was enough fodder for market volatility this week. Particularly, the US stock market has lately come a little untethered from its foundation in earnings and economic growth and started turning all its focus on politics. The passage of US tax reform stole the glory off the OPEC production cut extension. The Dow recorded new highs, as Senate Republicans narrowly approved the most sweeping rewrite of the U.S. tax code in three decades, slashing the corporate tax rate and providing temporary tax-rate cuts. The 51-49 vote brings the GOP close to delivering a much-needed policy win for their party and President Donald Trump. After the vote, President Trump said on Twitter that he looks forward to signing a final bill before Christmas. Attention now shifts to a House-Senate conference committee that will be charged with hashing out the differences in the bills and preparing a final version for both chambers to consider.
Date: November 27, 2017
The main headlines of the week revolved around the upcoming major events. UK’s attempts to achieve breakthrough in talks at December summit, oil march as OPEC nears production cut review and the vote on Senate’s version of tax plan after thanksgiving has kept asset prices sensitive to future events.
The Senate’s version of tax plan was released this week and Republican leaders plan a vote around Nov. 30. A deal is within reach if Republicans are willing to compromise on the size of tax cuts. Meanwhile, the Obamacare issue looms in the background, threatening at least one GOP senator’s vote. The mandate repeal still appears much more likely to stay in the bill, where it helps offset more than $300 billion in additional tax cuts. It’s also crucial to President Donald Trump’s goal of making corporate tax cuts permanent under the Senate’s budget rules.
Date: November 20, 2017
The week saw huge swings in global markets, particularly in the U.S. as shares saw the biggest drop in two months after touching record highs a week earlier.
Last week we notified our clients regarding our decision to move 100% to cash and in hindsight, this looked to have been perfect timing to avoid the volatile environment markets saw this week. Our timely decision, meant that our Safety First funds avoided such volatility and protected our annual returns, which are exactly in line with our goals.
We continue to monitor events and look for suitable opportunities to redeploy our funds. Markets are currently sensitive to tax cut reform progress in the U.S., the Senate election in Alabama, and earnings reports. This week saw lofty valuations, the flattening of the yield curve and a selloff in junk bonds adding to global investor concerns.
Date: November 13, 2017
Over the last year I have been honoured to serve as the Chief Investment Officer of Frenkel Topping Investment Management, being tasked with the incredibly important job of preserving your capital, outperforming inflation after costs and protecting you from the volatility of financial markets.
The DNA of Safety First has always been to first preserve and protect your capital. We are never afraid to move out of markets and to transition to one hundred per cent cash, when there is a global event that could give rise to unpredictable volatility. Safety First’s incorporates a vitally important benchmark unconstrained approach, which is a crucial investment tool available to enable me in my capacity as Chief Investment Officer to protect your capital from the dangers posed by uncertain markets. Safety First’s purpose is to deliver a smooth investment experience, where volatility is managed in a way that preserves capital over the longer term. As Chief Investment Officer, it is my responsibility to navigate Safety First through the potential dangers posed by any number of geo-political or macro-economic events, which appear to be occurring ever more frequently.
Here you will find a year book of Chief Investment Officer’s weekly newsletters enclosed that covers my thoughts over a tumultuous investment year, which I hope you find of interest.
Date: November 13, 2017
On Monday 6 November 2017, I took the decision to move all our Safety-First portfolios to 100% cash. Since I launched our Safety-First range of portfolios I have taken them to 100% cash several times to dampen volatility and avoid geopolitical risks where those risks were foreseeable. It is a unique approach which has served our clients well. Even our most adventurous Safety-First portfolio has less than [5%] volatility throughout 2017, protecting and preserving our client’s capital – our first priority.
We avoided the volatility and potential losses of Brexit, the US elections, the European elections and other geo-political events through 2017.
We are now perfectly positioned to redeploy our client’s capital as asset classes find lower levels and global macro risks recede. If that does not happen in 2017, we have locked in strong risk adjusted returns across all our Safety-First portfolios for our clients.
Date: November 7, 2017
There was no shortage of potential catalysts for investors this week. However, the response was relatively muted as things turned out to be as per expectations. Fed stayed, indicating a hike in December, BOJ kept on hold while the BOE, though pursued a rate hike as per consensus, the dovish tone resulted in GBP selloff, falling 1% to $1.31.
Federal Reserve officials reinforced expectations for a December interest-rate increase by subtly upgrading their assessment of the US economy while staying on hold this month. Pricing in federal funds futures contracts implied an 85% probability of a quarter-point move next month.
Date: October 31, 2017
The ONS on Friday morning, 27th October 2017 released the provisional data set for ASHE 6145 & 6146 (6115 equivalent). This is the second year in a row that the data has been made available before mid-November. This will certainly help with the recalculation process for all Periodical Payments due to be paid on or before 15th December 2017. The noticeable headline for 2017 is the fact that from the 70th percentile the % increase in median wages has not been as high as the rate of inflation measured by both RPI and CPI. Having spoken to the ONS I have confirmed that that the 12 month increase for these measures of inflation are 3.9% and 3.0% respectively.
Date: October 31, 2017
In the US, as investors witnessed the busiest days of the earnings season at the same time the political wrangling in Washington persisted at a breakneck pace. House Republicans adopted the budget resolution unlocking a process to cut taxes by the end of the year. The next step will be releasing a draft tax measure on Nov. 1.
President Donald Trump continued to string out his decision on the next Federal Reserve leader this week, giving mixed signals on his preference. By the end of the week, stakes of Federal Reserve Governor Jerome Powell being appointed were high, as President Trump seem to prefer him over others. The speculation is soon going to end in the coming week, as the Fed chair is expected to be announced on Nov. 3.