There is a lot for us to talk about this morning. Corporate earnings are looking pretty good and we are looking forward to finding out what will happen in this weeks Fed meeting. While we don’t expect the Fed to make any moves yet, it’s important to hear what they have to say. The Trump administration had a very busy first week in office and we’ve seen some positive movement in gas prices.
The Trump administration: What to expect in the next four years
We believe this week will be an example of what we can expect in the next four years of the Trump administration. In President Trump’s first week we saw some positive executive actions with the market rallying in response to it. Near the end of the week we had what was perceived as negative executive actions and the market responded by pulling back. We believe we could see this battle between good policy and bad policy over the next four years in the Trump administration.
Good news at the gas pump
For the first time in months we saw gas prices below $2 at the pump. This is great news for the consumer after the big rise in gas prices following the OPEC decision. The consumer is 70% of the economy so this is welcomed news.
The economy still needs more growth
In our vlog last week we talked about how we were looking forward to the GDP number coming out on Friday, which would give us a good idea of the type of economy the Trump administration inherited. Unfortunately, it was disappointing as GDP came in at 1.9% growth annualized. The economy really needs 3-4% growth in order to have everything working correctly within the machinery. It is more of an economic struggle when GDP growth is below 3%. While our economy has been below 3% for eleven years straight, we feel like it has a real potential to pick up because many of President Trump’s executive orders are aiming directly at the cost structure of businesses, like healthcare, and corporate taxation.
Potential for less economic drag
What caused a lot of economic drag last year came from the energy sector. This huge sector of the economy did not have a lot of investments because of the price. In light of the business cost saving measures from Trump’s executive orders, we feel like that has the real possibility to pop up in 2017.
We hope this gives you a better understanding of what is going on in the economy which can affect your portfolio. Please contact us if you have questions regarding your personal finances and investments.
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Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
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