As a more quantitative focused analyst, I keep focus one thing – the numbers. Stories are good, but numbers are better. At best stories, provide context for numbers, but stories of politics will not lead to market trends. Capital flows on trends in profits, growth, liquidity, and risk. Do not suffer from “shiny object” syndrome. The news of today may not impact the important fundamental trends.
The stories and themes for this month are similar to the last few. An investor has to address three questions. What is happening to global growth and is there a rotation in capital? What is the impact of potential liquidity changes from central banks? Will there be actual fiscal stimulus that can ignite growth and profits? Focus on these three to determine any changes in portfolio construction.