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Arrowhead Asset Management Post-Debate Investment Update (9-27-2016)

Global currencies and Asian markets rise on Clinton victory in 1st US Presidential Debate

Asian stock shares recovered from an early bout of nerves while the Mexican peso surged on Tuesday as investors awarded the first U.S. presidential debate to Democrat Hillary Clinton over Republican Donald Trump.

Markets have tended to see Clinton as the candidate of the status quo, while some are not sure what a Trump presidency might mean for U.S. foreign policy, international trade deals or the domestic economy.

Opinion polls have shown the two candidates in a tightening race, with the latest pre-debate Reuters/Ipsos polling showing Clinton's lead reduced to 4 percentage points, with 41 percent of likely voters.

However, after the debate, early risk aversion faded, seeing MSCI's broadest index of Asia-Pacific shares outside Japan recouped early losses to rise 0.5 percent.

Japan's Nikkei swung 0.3 percent higher, having been down 1.5 percent at one stage, while the U.S. dollar strenthened to 100.83 yen from a one-month low around 100.08.

"Markets started to call the debate for Hillary within the first 15 minutes or so, with the Mexican peso surging in what is probably its busiest Asian session in years," said Sean Callow, a senior currency analyst at Westpac in Sydney.

"The intitial bounce in S&P futures, the Australian currency, and US Dollar/Yen relationship all show that investors were watching closely and didn't hesitate to declare Trump the loser.

"In currencies, the dollar lost ground by 1.9 percent against the Mexican peso, lifting the peso from an all-time low hit in recent days on concerns that a Trump presidency would threaten Mexico's exports to the United States, its single biggest trading partner.

TRUMPOMETER?

"Yes, there's a thing called 'Trump thermometer'," said David Bloom, London-based global head of forex strategy at HSBC. "If you want to know who won the presidential debate, don't go to Twitter or Facebook. Just look at the price relationship between the US dollar and the Mexico peso."

"Much the same goes for the Canadian dollar, which touched its lowest since March in early trade before rallying to $1.3171 on its U.S. counterpart. Against a basket of currencies, the dollar was a fraction firmer at 96.360 and the euro was steady at $1.1242.

Other safe-havens also ebbed, with yields on U.S. 10-year Treasuries rising a basis point to 1.60 percent." Markets do not like uncertainty, which is what the idea of a Trump presidency brings with it."

"Hillary looks the stronger of the two," said a senior markets manager at SMBC Trust Bank in Tokyo. "Bullish for stock risk, and yen negative."

"Punters"

Risk statisticians, or "punters" at online betting companies in Australia, shortened the odds on a Clinton win in the wake of the debate, leaving her as the clear favorite now among election gamblers.

A CNN poll of viewers, which the broadcaster noted was likely skewed somewhat to Democrats, showed 62 percent thought Clinton won the debate with 27 percent for Trump. Similar debate results in numerous other post-debate media polls showed Clinton the winner, some as high as 70% to 30% respectively.

Trumpeters!

On the other hand, and not at all surprising, right wing conspiracy theory media outlets and pro-Trump websites such as Breitbart, Alex Jones, Drudge Report, and InfoWars - as well as the clearly Republican Party biased media outlet Fox News - showed Trump the winner among its unscientific polls - poles that conveniently surveyed their already declared Trump voter audience.

Today's Market Rally

After the major media scientific polls declared Clinton the debate victor, futures prices for the S&P 500 stock index gained over 0.5 percent, up over 100 points, an unusually large move based on Asian market activity. Yet as of morning trading in the US, S&P 500 stock futures modestly paired post-debate gains due to negative market news coming out of Europe.

Bloomberg, September 27, 2016

Related articles:

https://www.washingtonpost.com/news/fact-checker/wp/2016/09/23/trump-versus-clinton-a-debate-fact-check-cheat-sheet/

http://www.businessinsider.com/why-hillary-clinton-won-the-debate-2016-9

 

Current Holdings

Below are our current holdings and corresponding percentages in ourprimary Fidelity account(s) as of today, September 26, 2016:

Large Fidelity IRA / Brokerage portfolios:

S&P 500 Equal Weight (RSP) 5%
S&P 500 Growth (IVW) 5%

Technology (XLK) 5%
Industrials (XLI) 5%
US Dividend Stock (SDY) 5%
HIgh Yield Bond (HYG) 5%
Biotechnology (XBI) 5%

Regional Banks (KRE) 5%
Ecolabs (ECL) 3%
PayPal (PYPL) 3%
Qorvo (QRVO) 3%
Red Hat (RHT) 3%
Tesla (TSLA) 3%
Whole Foods Market 3%
Unilever (UN) 3%
Money Market cash (39%)

Small Fidelity IRA / Brokerage portfolios (under 50K):

S&P 500 Growth (IWV) 10%
US Dividend Stock (DVY) 20%
Biotechnology (XBI) 20%
Money market cash (50%)


Fidelity ORP/403b Portfolio holdings

Select Environmental Services fund 10%
Select Multimedia fund 10%
Select Software fund 10%
Contra Fund 10%
S&P 500 10%
Goverment Money Market fund 50%

* Please contact us if you have any questions about your Fidelity account holdings. 

 

 

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