NorthCoast has been recognized with Top Guns status by Informa Investment Solutions’ PSN manager database for the management of its Read More
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” – Ben Graham
Uncertainty and surprise lead today’s market volatility
U.S. futures were pointed lower this morning and U.S. equity markets are expected to move in volatile action today as a result of the U.S. presidential election. In our position, last night’s election results do not indicate any substantial change of equity outlook in the near term. The macroeconomic, sentiment, and technical indicators that we monitor all remain positive and indicate a market primed to advance in the near-term (i.e. unemployment remains at historic lows, wage growth improving, better than expected GDP growth, manufacturing sentiment continues to increase and technical moving averages are providing positive momentum). We will monitor any new information in the coming days and weeks to determine the most appropriate and prudent allocation of capital and will adjust our exposure as necessary.
Economic policy change is the key factor to monitor in the coming months
Donald Trump ran a campaign that was adamant about a shift away from “business as usual” when it comes to global trade, securities, and entitlements – all of which impact economic markets. Much of this uncertainty is the cause of today’s volatility. There are two things that equity markets do not respond well to; 1) uncertainty and 2) surprise. They received a healthy dose of both last night. However, the data has not changed and markets will quickly digest the election results.
Headline news impacting global markets is nothing new
We encourage you to revisit our previous publications (listed below) over the last three years when headlines impacted markets in a limited time range. Each short-term setback was a market inefficiency based on news instead of market-moving economic data.
June 24, 2016; The Brexit vote – Global markets plummeted in one trading session after Great Britain voted to exit the European Union. However, once investors obtained all the necessary data and market efficiency prevailed, U.S. equities have advanced over 5% since that day. Read our statement published on June 24, 2016.
The information contained herein has been prepared by NorthCoast Asset Management LLC (“NorthCoast”) on the basis of publicly available information, internally developed data and other third party sources believed to be reliable. NorthCoast has not sought to independently verify information obtained from public and third party sources and makes no representations or warranties as to accuracy, completeness or reliability of such information. All opinions and views constitute judgments as of the date of writing without regard to the date on which the reader may receive or access the information, and are subject to change at any time without notice and with no obligation to update. This material is for informational and illustrative purposes only and is intended solely for the information of those to whom it is distributed by NorthCoast. No part of this material may be reproduced or retransmitted in any manner without the prior written permission of NorthCoast. NorthCoast does not represent, warrant or guarantee that this information is suitable for any investment purpose and it should not be used as a basis for investment decisions.
PAST PERFORMANCE DOES NOT GUARANTEE OR INDICATE FUTURE RESULTS.
This material should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any securities or investment products or to adopt any investment strategy. The reader should not assume that any investments in companies, securities, sectors, strategies and/or markets identified or described herein were or will be profitable and no representation is made that any investor will or is likely to achieve results comparable to those shown or will make any profit or will be able to avoid incurring substantial losses. Performance differences for certain investors may occur due to various factors, including timing of investment. Investment return will fluctuate and may be volatile, especially over short time horizons.
INVESTING ENTAILS RISKS, INCLUDING POSSIBLE LOSS OF SOME OR ALL OF THE INVESTOR’S PRINCIPAL.
The investment views and market opinions/analyses expressed herein may not reflect those of NorthCoast as a whole and different views may be expressed based on different investment styles, objectives, views or philosophies. To the extent that these materials contain statements about the future, such statements are forward looking and subject to a number of risks and uncertainties.