Asset Allocation for December 2016

In November investors were pricing the results of US Presidential election. Donald Trump’s victory was a surprise for many investors.

Among the main winners of Trump elected were American dollar and American equities (especially, banking, infrastructure and defense sectors). Investors raised their bets on FED rate hike in December and prepared for domestic market orientation of US economy for the next 4 years.

The main outsiders of post-election period were bonds and gold. Both assets fell sharply to their year-to-year lows. US Treasuries holders seemed to have more than USD 1 trillion losses during November.

In December investors will attempt to keep indexes near current high levels. We predict volatility month for oil prices as we expect OPEC to reach the «black gold» production cut deal.

Threat and challenges in world markets:
   - Worldwide oil production cut possibility
   - Systematic economy crisis China
   - BREXIT aftermath – EU disruption and political crisis
   - Monetary policy tightening by US FED


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