October was a disaster for the stock market. November was very kind, though the last few trading days brought forth some profit taking. However, the November themes continue to play out – small caps, financials, materials, energy, industrials and consumer discretionary (retail and restaurant) stocks are leading the charge. Large cap technology, utilities and consumer staples are laggards. Most of all, in November, the bond market began its much anticipated fall from grace.
I am anticipating that the post-election rally will continue in December and the recent bout of profit taking will soon run its course. First though we have to navigate through Friday’s big event, the November jobs report. I have a feeling that expectations of 180,000 new non-farm jobs are just about right and in line with the recent trends. Should it come in significantly lower than that, it will raise some eyebrows suggesting that the pre-election jobs numbers were cooked.
If we come out unscathed after the labor report, and I am of the opinion that we will, then it is fair to say that the Santa Claus rally which Wall Street normally expects, should begin fairly soon. If Friday’s report shocks the markets in anyway then we could get some coal.
Let me throw some statistics your way. On average in December of Presidential election years, the SPX rises 1.25%. When a Republic won the election, that performance was a bit less at 0.90%. In all years it rises on average 1.67%.
I am beginning to see some good opportunities appear in the real estate investment trust (REIT) sector. These stocks have been beaten down to levels in which you can grab solidly managed companies with dividend payouts in excess of the 10-year US Government Yield. Some worthy candidates are in the high end and outlet retail REIT sector. If I take any action, it will be for out Dividend Value Strategy and will let you know once it occurs.
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
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
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