Investors Revisit the 2016 Playbook

But Will It Last?

Highlights

• Valuations, interest rates, and fiscal health pose as potential constraints to the 2016 playbook

• Central banks take back center stage (Fed and BoE on deck today)

• Global automakers’ results are a stark reminder of the weak demand for big-ticket purchases

• China’s exports jump, but is it a front-running of potential tariffs?

Key Takeaways

Post-Election Market Rally 

• Investors quickly went to the 2016 playbook, which was the last time the Trump-led GOP pulled off a clean sweep. The risk-on trade is in full swing — equities are ripping and safe-havens like gold and especially Treasuries got smoked. But how long will this playbook last? The runway looks to be shorter this time around (valuations, interest rates, and fiscal health look to be constraints).