Last Wednesday, President Charles Thomasson (photo left, with meeting Chairman Johnny Bueti), wearing his hat as a Partner of Wilsons Advisory, gave us a brief run-down on how the stock market reacted after the 6-month reign of US President Joe Biden. As is customary, Charles opened up with Disclaimer – “not designed as specific investment advice”.
“Donald Who?” seems to be the expression not uncommon in his professional circles these days. “Historically, markets perform well under a Democrat President,” Charles said. Certainly, one cannot call it anything other than going strong (see graph on right). Had you invested 12 months ago (should that read: had you dared to invest), you would have had a return of 24% on the ASX, 33% on the S&P, or if you had just bought Iron Ore: 110%!  The reason? “There is no other alternative”, Charles quipped. Cash rates are so low (10-year Bond rates are at just 1.7%). Borrowing costs are low. Australians are spending their money locally (Harvey Norman, JB HiFi etc) or on online markets such as Amazon.  Charles elaborated somewhat on emerging markets, on the China situation (“the US and China owe each other a lot of money…”), the US Corporate Tax Policy (generally, they go up under a Democrat regime).
And what about our budget returning to Black? In Charles’ view, the handling of the Federal Government’s COVID crisis with ‘Jobkeeper’ made the big difference between massive unemployment, with the result of the economy crashing, vs employees retaining their jobs and businesses staying afloat. With the building and Real Estate industries going gangbusters, there are now substantial issues as a consequence: Building material prices have risen sharply, due to supply chain issues.
Some more detailed information can be downloaded from the Wilson Advisory website:  Click here and here.