Quinnipiac University's G.A.M.E. VII Forum Panel Sees a Strong Economy With an Investment Outlook Somewhat Clouded by Uncertainty
NEW YORK, March 30, 2017 /PRNewswire-USNewswire/ -- The "Global Markets" panel on the first day of Quinnipiac University's seventh annual Global Asset Management Education (G.A.M.E.) Forum in New York on Thursday described a healthy economy, with low inflation and unemployment, marred only by some market "jitters" because of political uncertainty.
Abby Joseph Cohen, senior investment strategist and president of the Global Markets Institute at Goldman Sachs, described President Donald Trump as "a very lucky man" because the U.S. economy began to re-accelerate at the end of 2016, and the benefits are being felt with faster-paced economic development. "Even Europe is doing better," she said.
Cohen said that the equity markets are priced about where they should be. She cautioned, however, that the "political overlay" must be considered. That means, she and other speakers said, not only whether President Trump will be able to achieve his policy goals in health care, tax reform and elsewhere, but also what will happen internationally with Britain's Brexit decision, and upcoming European elections.
Cohen expressed some concern about the future value of bonds, because of rising interest rates. She added that because the fundamentals are strong, "it will take more than usual to unsettle the markets, though they can be unsettled."
David Kelly, chief global strategist at J.P. Morgan Funds, noted that "plain vanilla investing doesn't cut it anymore." He said a cautious portfolio that over the last 25 years might have averaged eight percent returns is now likely to produce only four percent. He compared the U.S. economy to a tortoise, and warned that stimulus could backfire: "If we put the tortoise on steroids, it could overheat," he said.
Kelly also advised investors not to ignore opportunities in Europe. And he noted that, because of baby-boomer retirements and other factors, 85 percent of net workplace growth in the economy over the next 20 years will be coming from people born outside the U.S. and their children. "We can't grow without more legal immigration," he said.
Ralph Acampora, senior managing director at Altaira Capital Partners, made parallels between the early days of the Trump Presidency and that of his fellow conservative, Ronald Reagan. "Reagan had a honeymoon lasting six months, and the markets were up," he said. The markets slumped into bear territory with Reagan's poll ratings, he said, but later recovered with a secular bull market lasting 18 years. "We might see a bear market followed by across-the-board recovery," Acampora said. "It's not the end of the world."
Amanda Doolittle of Bloomberg TV described a strong market performance marred by "jitters" following President Trump's failure to repeal Obamacare. "Will he be able to implement tax reform as fast as had been hoped?" she asked. Like the other speakers, she recommended "keeping an eye" on the bond market and other asset classes that could be showing signs of trouble.
SOURCE Quinnipiac University
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