Roberts Nash Advisory Group

Morning Comment December 20, 2018

"That’s a swing and a miss on three distinct opportunities to improve market sentiment, i.e., a strikeout that should have been averted. Mr. Powell had been preparing us for a more dovish stance. Recall that in remarks made just about a month ago (Nov. 14), he compared policy making at the moment to “walking through a room full of furniture and the lights go off.” We find it hard to believe that lights have been turned back on in the past month. As it turns out, long term interest rates continued to fall and the yield curve (10-year note minus 3-month Tbill) flattened to a post-recession low of 38 bp after Mr. Powell’s press conference. That is below the 50 bp threshold normally onsidered to be favourable for equity markets and risk assets in general. After today, the S&P 500 is already down close to 15% from its September 2018 high, a drawdown that matches that observed in 2015 when markets feared a recession in China."    Full Comment

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** I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial **

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