Today’s announcement by President Trump regarding his intent to substantially cut taxes some time this year brought out the usual ‘trump trade’ reaction, but focus quickly shifted to the first round of the French national election to be held this weekend. The financial sector led the decline, with all major banks down at least a tenth of a percent by the end of day. We were insulated from that particular move as our high dividend paying issues (like AGNCP) responded to a slight uptick in treasury yields.
Crude fell for the third day in a row, but not dramatically. Oil stocks ended mixed, with PEGI and RDSA ending up 0.14% and 0.19% respectively. Expectations for after the weekend strongly depend on the outcome of this preliminary election. More about the particulars of that election can be found at the Washington Post here. If Marine Le Pen does well expect further losses in the financial sector, a rise in the dollar, and another drop in crude.
Overall our portfolio fell very slightly, thanks almost entirely to the presence of index tracking ETFs in our lineup. Our weight in energy LPs and high dividend paying issues is largely the reason we so strongly outperformed today. Over the weekend we’ll be researching potential option derived positions to take in the new week, more to come on Monday.