Will the Rally in Small-Cap Stocks Likely Continue in 2017?
Another factor that impacts small-cap stocks’ performance is the yield curve. The yield curve has remained on the flatter side since the recession.
Small caps strengthened throughout the year due to expectations of fewer rate hikes in 2016 by the Fed. The markets expected more rate hikes.
The demand for emerging market bonds improved when fear of rate hikes abated in 2016. Fundamentals are still favorable for emerging debt markets.
A strengthening dollar impacts the emerging bond market’s performance. Uncertainty started revolving around the performance of emerging market debt.
Donald Trump’s surprise presidential win and the rising dollar called for a sell-off in most emerging market currencies like Mexico and Turkey.
In the emerging market bond space (PCY) (EMLC), high-yield bonds and local currency bonds outperformed hard currency sovereign bonds.
Trump’s unexpected presidential victory caused short-term uncertainty about markets and policies. His win reinforced a reflationary theme in global markets.
Trump recently attacked Fed rates and even talked about trying to gain more control over the independent body.
Donald Trump’s ambitious infrastructure spending is expected to add jobs in construction, steel manufacturing, and other sectors.
Donald Trump’s victory over Hillary Clinton marked the triumph of aggressive growth strategies and deregulation.
Gold demand fell 10% in 3Q16, according to the World Gold Council. Gold ETPs have been the only gainers.
The trade-weighted US dollar index, or the broad index, which measures the value of U.S. dollar against other world currencies, was up 1.2% when Donald Trump was declared president-elect.
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Robust growth in the restaurant industry has led to high expectations from investors. These expectations have, in turn, led to rich valuations in the sector.
The Restaurant ETF (BITE) is the only ETF that invests exclusively in restaurant stocks. The top ten holdings of BITE currently make up ~30.0% of the ETF.