Ain't No Party Like an Impeachment Party

At times the stock market can be a pretty good barometer of American sentiment.  And if Nancy Pelosi wanted her Democratic colleagues to present a solemn façade as they voted for impeachment this week, the message was received in the financial markets as well.  With all of the surprises of a funeral, the House of Representatives voted Wednesday night to impeach President Donald Trump.  The stock market reaction?  A yawn.

The US stock market, with an election less than a year away and the sitting President facing impeachment, still has not priced in one iota of a cent of political risk.  The S&P 500 now sits at record highs and remains unfazed by any threat to the status quo.  In more normal periods of expansion, one of the greater fears for market participants is disruption of the status quo.  However, current times being what they are, the market appears more like sharks at a feeding frenzy, overcome by sensory induced euphoria.  Equity momentum remains at peak elevations, pushing the stock market higher and higher, with little fear of a pullback.  Determining when, if at all, the post-party hangover will occur is an elusive answer.

As for the remainder of the year, the market now seems on autopilot and is content grinding higher with little economic news due out between now and December 31.  However, the early part of next year may provide a healthy dose of volatility.  The Federal Reserve’s latest version of Quantitative Easing, which they don’t call QE, designed to alleviate malfunctioning in the short-term lending markets is intended to be a temporary measure.  The inception of this temporary measure, at the end of September, and the recent leg higher in the stock market, which began October 2^nd, has many asking if this move is causal or just merely corollary.  Should the Fed’s newest version of quantitative easing subside next quarter we may see a pullback in the stock market.  But that is a question for next year.

On a final note, this will be our final letter for 2019.  We would like to thank our clients from the bottom of our heart for your patronage, it is a pleasure to serve you all.  We would also like to thank you for reading our weekly letters and we hope that you have enjoyed reading them as much as we love putting them out.  David and I would like to wish you all Happy Holidays.

Thank you,

Zach and Dave   

   Disclosures

All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.  Tax laws are complex and subject to change. Calibrate Wealth LLC, does not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Calibrate Wealth. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account.

This material does not provide individually tailored investment advice. It has been prepared without

regard to the individual financial circumstances and objectives of persons who receive it. The strategies

and/or investments discussed in this material may not be suitable for all investors. Calibrate Wealth

recommends that investors independently evaluate particular investments and

strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a

particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Investing in commodities entails significant risks. Commodity prices may be affected by a variety of

factors at any time, including but not limited to, (i) changes in supply and demand relationships, (ii)

governmental programs and policies, (iii) national and international political and economic events, war

and terrorist events, (iv) changes in interest and exchange rates, (v) trading activities in commodities

and related contracts, (vi) pestilence, technological change and weather, and (vii) the price volatility of a commodity. In addition, the commodities markets are subject to temporary distortions or other

disruptions due to various factors, including lack of liquidity, participation of speculators and

government intervention.

Foreign currencies may have significant price movements, even within the same day, and any currency

held in an account may lose value against other currencies. Foreign currency exchanges depend on the

relative values of two different currencies and are therefore subject to the risk of fluctuations caused by

a variety of economic and political factors in each of the two relevant countries, as well as global

pressures. These risks include national debt levels, trade deficits and balance of payments, domestic and

foreign interest rates and inflation, global, regional or national political and economic events, monetary

policies of governments and possible government intervention in the currency markets, or other

markets.