Without a doubt, my favorite commercial during the Rio Olympics, and most likely for the year was the Michelob Ultra ad. For the record, Michelob is owned by Anheuser-Busch Inbex (BUD).
However, it’s not a golf hole that is important to us this week. It’s the Jackson Hole. The Kansas City Fed sponsors an annual Economic Symposium in Jackson Hole, Wyoming, this week. According to the KC Fed, the event is attended by “participants include prominent central bankers, finance ministers, academics, and financial market participants from around the world. “ There are some important speeches at the event, but there is also plenty of fishing and schmoozing going on. It is the summer version of the Economic Forum held in Davos each January.
Whereas several Fed officials have been spouting off their opinion as to the likelihood or need for a rate increase in September, the world will be waiting for FOMC Chairperson Janet Yellen’s speech at Jackson Hole on Friday, for some insight or clue. Between now and then the markets will remain in their low volume neutral stance. However, unlike most August Friday’s, on this week’s Friday, we should expect some volatility to liven things up.
The Fed understands that if they do not act in September, at its next meeting, then they will not want to act at the November meeting, to avoid influencing the election, a week away. I say right now, there is a 50/50 chance of a rate hike in September. Even with a rate hike this year, the equity risk premium – the benefit from investing in stocks over bonds – will still favor stock investors.
In case you could not tune into Bloomberg Radio last Thursday, here is the link to the podcast of the interview.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC held no positions in stocks mentioned; although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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