KIM Investment Committee Market Summary – Q3 2017

KIM Investment Committee Market Summary – Q3 2017

The Markets
The day to day movements of the markets during the third quarter required magnifying glasses to actually see them. On average, the daily movement amounted to just about 20 Dow points. Only 4 of the 58 trading days saw a 200-point or more move. With a rather volatile political backdrop, investors are wondering how stocks managed to rise during the quarter. Since October has been the most volatile month historically, we could get an answer soon!

The Economy
It has been said that economists were created to make weathermen look good. The final quarter of the year will likely be more affected by the weather than anything “done” by companies, the Fed or Congress. Hurricanes Irma and Harvey are likely to impact much of the economic data, clouding the “real” economic activity for at least a few months. The most recent employment report is just one example, as the economy “lost” 33,000 jobs. Much of the job loss was in restaurant/food service. Inflation and wage growth jumped as well as overtime and use of scarce resources to get back to normal will likely keep the talk of higher inflation front and center for the Fed. We are trying to see through the storms to a sunnier day, but the economic data may not be cleared up until late in the fourth quarter.

The Portfolio
We have recommended taking some of the gains achieved this year and reallocating some to the safer bond/money market instruments while also favoring the better opportunities overseas. Valuations in the US remain elevated and higher than most anytime in history. What gives us pause about being too aggressive in the US equity market is that many sectors and asset classes are simply not attractive from a price standpoint. International valuations however, remain inexpensive with emerging markets still cheap relative to their historical ranges.

Kingsview Asset Management, LLC (“KAM”) is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.