Global Investment Outlook and Strategy
January 9, 2017
Encouraging global economic growth prospects and passage of the Tax Cuts and Jobs Act helped push the U.S. stock market higher again in December. With regard to the U.S. economy, we project real GDP growth will accelerate to +2.7 percent in 2018 from an estimated rate of +2.2 percent in 2017 driven by buoyant consumer spending, improving business investment, supportive financial conditions, and stimulative fiscal policies. Key beneficiaries of the Tax Cuts and Jobs Act include consumers, domestic-centric firms with a high effective tax rate currently, and multinational corporations that can repatriate large offshore cash balances. Our judgment is that equity markets have only partially priced in the benefits of tax reform and that upward earnings revisions will be an additional catalyst for stocks in the months ahead. Furthermore, we expect merger and acquisition activity to accelerate in many sectors as clarity around tax reform (and to a lesser extent, regulatory reform) emerge. In December, the yield curve continued to do what it has done all year: Flatten. For the most recent month, quarter and year, 30-year maturity bond yields moved modestly lower while shorter-term maturity yields moved significantly higher. In our closed-end bond fund strategies, we are looking for a first quarter rebound in funds that experienced tax loss selling at year-end and then focus on funds with the best relative yield and discount combinations.
For more details, including a longer discussion on U.S. tax reform, please see Sit Investment Associates’ January 2018 Global Investment Outlook and Strategy paper. Click here: Global Outlook and Strategy (Adobe Acrobat) or e-mail us at: firstname.lastname@example.org.
MMAF Has Awarded Over 16,500 Grants
Since its inception in 2005, Minnesotan’s Military Appreciation Fund (MMAF) has awarded over 16,500 grants totaling over $10.5 million to Minnesota military personnel and their families. MMAF is a non-partisan, non-political 501(c)(3) non-profit corporation. It is a statewide fundraising initiative by the citizens of Minnesota. Its mission is to say “thanks” to Minnesota service members and their families by providing cash grants to those who are making sacrifices in the defense of our freedoms in combat zones around the world.
The tragedy of 9/11 compelled the late Eugene C. Sit, founder of Sit Investment Associates Inc., to create MMAF in order to thank and give back to Minnesota service members. Sit Investment Associates Inc. continues to support the efforts of MMAF.
To donate and learn more about Minnesotans’ Military Appreciation Fund, please visit the website at www.thankmntroops.org.