Asset Allocation for December 2017

In November investors played the idea of FED rate hike and were very cautious about their top picks ahead of Christmas rally.

Leading investment banks unanimously assure community in FED rate hike in December. It led to the Financials to become the best stock performers of the month. The main question remains in the 13th December FOMC is Janet Yellen’s rhetoric during her last meeting as the Chair of the Board of Governors of the Federal Reserve System.

At the start of December US Senate voted for the tax reform that would reduce corporate taxes to a single rate 20%. This novation caused speculative demand on the companies oriented on domestic economy (retail, construction, service industries etc.). They will benefit the most from tax rate cut on their future profits.

It is worth to mention about crypto market upgrowth in capitalization that has exceeded 500 bn USD by the early December. The truth is that the market value of bitcoin is now commensurate to the value of Royal Dutch Shell (270 bn USD) or Wal-Mart Stores (287 bn USD). Crazy!

Threat and challenges in world markets:
  - Monetary policy tightening by US FED
  - Growing tensions between USA, South Korea, Japan and North Korea

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