Initial Reaction to the Election

As we all digest the election results, and amid much near term market uncertainty, a few thoughts:

Good businesses in America will for the most part still be good businesses. The shift in political direction will likely include less regulation and in some cases deregulation. Domestic energy infrastructure with its ability to exploit America’s shale resources and limit our dependence on crude oil exports is unlikely to be one of the economy’s losers. While the turmoil in equity markets raises concern of an economic slowdown, the operating performance of midstream Master Limited Partnerships (MLPs) was only modestly affected by last year’s collapse in crude oil prices. Energy consumption in the U.S. is remarkably stable from year to year, and fee-based contracts that limit commodity price risk are widely employed. We think in times of uncertainty, investments in domestic energy infrastructure are one of the more robust choices you can make.

With promises of tax cuts, infrastructure spending and a vow to replace Janet Yellen because of the Fed’s low rate policy, there’s little reason to be constructive on bonds.

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3 replies
  1. Peter De
    Peter De says:

    Simon, where did you get that notion that his desire to replace Yellen is because she wants to keep rates low. Sorry, way off the mark on that one. How about that she’s just another political Obama hack. Time to “drain the swamp”. To the victor…

    Reply
    • Simon Lack
      Simon Lack says:

      “Republican presidential nominee Donald Trump pulled Federal Reserve head Janet Yellen into Monday night’s presidential debate, claiming she’s holding down interest rates to keep the economy humming while President Obama remains in office.”
      From the second debate, link attached to blog post.

      Reply
  2. Peter De
    Peter De says:

    I watched each debate, his comment was in the context that…’she’s a political hack for BO’, not that he wants interest rates higher.

    Reply

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