Analytics, Banks, Financial Services, Latvia, Market Review

“November was a month of surprises. Donald Trump election victory appeared to be less catastrophic than was feared. Investors focused on expected changes in fiscal policy – boosting spending on infrastructure, reforming the tax code, reducing the regulatory burden. The unexpected presidential election outcome boosted performance of industrial metals and equity, especially returns on stocks focused on the U.S. domestic market. In addition, Trump’s victory increased future inflation expectations, which in its turn raised probability of the FED’s rate hike in December”, note the experts.

“OPEC reached a deal to cut production by 1.2mln barrels a day for the first time in eight years. The cartel also made an agreement with non-OPEC countries to contribute by a reduction of 0.6mln b/d production. The first market reaction was extremely bullish. However, the near future of oil prices depends on agreement execution and shale oil reaction. Overall, we expect further steady recovery in oil prices”, consider the experts.

It is also noted in the review that continued infrastructure investment program in China and expected infrastructure spending boost in the U.S. ignited prices for industrial metals. Moreover, the OECD radically changed its view on fiscal policy – previously the organization favored fiscal austerity, now OECD looks favorably upon fiscal stimulus.

“In November, almost all US companies finished filling quarterly financial results. The results beat both analysts’ estimates and investors’ expectations. According to the Factset, S&P 500 earnings grew by three percent – the best pace in a year. Overall, this month various surprises and events were generally favorable for investors”, note specialists of the Rietumu Group.

The RAM review and latest expert comments can be read here.