May 12, 2017

Capital Trading Group Daily Newsletter 5-12-2017

U.S. Dollar is Heading for its Best Week this Year!

U.S. dollar is heading for its best week this year as more economic data shows inflation and retail sales picking up momentum, providing the Federal Reserve with perhaps even more reason to raise interest rates. Remember, Cleveland Fed President Loretta Mester said earlier this week that the U.S. economy warrants more policy tightening, while Boston Fed chief Eric Rosengren called for three more rate hikes this year.

Stocks appear poised to trade slightly lower to end the week after posting fresh new all-time highs on Monday. A lot of uncertainty and noise is being generated in Washington surrounding President Trump’s decision to fire FBI Director James Comey, in fact things seem to have intensified the past couple of days. The Senate Intelligence Committee heard testimony from several officials yesterday, including acting FBI Director Andrew McCabe. McCabe sought to reassure lawmakers that the investigation into Russian meddling in the Presidential election was appropriately resourced and was proceeding independently of any political influence from the White House.

In the Senate Finance Committee, Trump’s nominee for a Treasury post is now being blocked by the top Democrat, Ron Wyden of Oregon. He says he’s putting a hold on Sigal Mandelker's nomination to become undersecretary for terrorism and financial intelligence until the Treasury Department provides documents about the financial ties between Russia and Trump associates. However, the Senate did finally confirm Trump’s trade nominee, Robert Lighthizer, which means negotiations of major trade agreements, like NAFTA, may finally start moving forward.

Next week will likely see a continuing examination of the details surrounding Comey’s dismissal and the Russia probe. Some Democrats are pushing for the Justice Department to open a separate investigation. The Senate’s work on crafting a new bill to repeal and replace the Affordable Care Act will also be in the headlines, though it’s not expected they will have a working bill for at least another week or so.
As for today, economic reports worth noting include April Consumer Prices, Retail Sales and Business Inventories. Earnings are very light with Allianz and JCPenney being the main highlights.
There is not a lot of market-moving activity on the calendar for next week either. Data is very light with just Empire State Manufacturing and the Housing Market Index on Monday; Housing Starts and Industrial Production on Tuesday; and the Philadelphia Bed Business Outlook on Thursday. There are only two Fed speakers on the calendar next week, Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard.

With little in the way of economic news, I suspect the talking-heads in the media will look to make the most out of headlines form Washington. In other words it wouldn't surprise me to see negative spin in the media put a slight drag on the market.



Finally, we will decidedly end our notes with our reaffirmation of the growing need for alternative strategies. We would like to think that our alternative view on markets is consistent with our preference for alternative risk and alpha driven strategies. Alternatives offer the investor a unique opportunity at non correlated returns and overall risk diversification. We believe combining traditional strategies with an alternative solution gives an investor a well-rounded approach to managing their long term portfolio.

Contact Our CTG Alternatives Specialist Today!
(800) 238-2610

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With the growing concentration of risk involved in passive index funds, with newly created artificial intelligence led investing and overall market illiquidity in times of market stress, alternatives can offset some of these risks.

It is our goal to keep you abreast of all the growing market risks as well as keep you aligned with potential alternative strategies to combat such risks. We hope you stay the course with us, ask more questions and become accustomed to looking at the markets from the same scope we do. Feel free to point out any inconsistencies, any questions that relate to the topics we talk about or even suggest certain markets that you may want more color upon.
Capital Trading Group, LLLP ("CTG") is an investment firm that believes safety and trust are the two most sought after attributes among investors and money managers alike. For over 30 years we have built our business and reputation in efforts to mitigate risk through diversification. We forge long-term
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