Market Week in Review

See how elections may create investment opportunities.

In this week’s video update:

  • U.S. jobs and inflation numbers point toward a more certain U.S. Federal Reserve (Fed) rate hike in December.
  • Earnings look positive in the U.S. and even better in Europe.
  • U.S. elections could cause short-term volatility. See how that may create investment opportunities as well.

On this week’s update, Rob Cittadini, regional director, consultant relations, interviews Investment Strategist Paul Eitelman to dig into potential investment opportunities created by the U.S. presidential election.

U.S. jobs, inflation, and Fed rate hikes

Eitelman begins with an update on October U.S. jobs numbers, as the number for non-farm payroll jobs hit 161,000. This is below the 200,000 numbers the U.S. has been hitting recently, but Eitelman believes this is still strong enough to gradually reduce unemployment. And wage inflation came out at 2.8% year over year—the highest that number has been since May of 2009. Based on comments made at this week’s Fed meeting, Eitelman believes those numbers are strong enough to make a December interest rate hike even more certain.

Earnings in Europe and the U.S.

Eitelman mentioned that third-quarter 2016 earnings have been mostly positive in the U.S. market. With 75% of companies having reported, the cumulative earnings number is in the 2-3% positive range. In Europe, the numbers are significantly stronger, with some signs of double-digit growth, along with some improvement in profit margins. Eitelman believes this differentiator shows a significant contrast between the two markets.

U.S. elections and potential opportunities

With polls tightening between candidates Hillary Clinton and Donald Trump, Eitelman said uncertainty about the outcome of U.S. presidential elections have made markets a little jittery. That said, Russell Investments’ strategists believe that market fundamentals, both in the U.S. and globally, still look strong. Eitelman also mentioned that the president’s ability to impact markets is often less than people think

That combination—short-term market jitters and solid fundamentals—could create significant investment opportunities for savvy investors. If an unexpected election outcome causes a short-term dip, the opportunities created there may be worth a closer look.

For more of our insights on U.S. presidential elections, click here.

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