Wish You Were There!

Phil orlandoLast week we enjoyed a wonderful evening with our clients and their guests, as Phil Orlando addressed the group and spoke on his views of the market moving forward. Gib and I had the opportunity to continue the conversation with Phil and learn his opinion of key factors that may affect the market moving forward. Let me just say the whole evening was GREAT! First, let me thank Phil Orlando again for taking the time out of his busy schedule to come and share not only with our clients, but to take extra time to share with Gib and I his views of the market plus year-end strategies. Thanks also to our clients and guests who attended, and the HMC staff for being there with all the details in place.

For those of you who do not know Phil Orlando, he is the Senior Vice President, Senior Portfolio Manager, Head of Macro/Balanced Team, Chief Equity Strategist for Federated Investments and a regular contributor on many of the national money shows we all see daily. He is a 30 year plus veteran in our industry and his understanding of economic factors and disciplines are well respected industry wide. He had spoken with us last year and we are fortunate to continue a relationship with him and Federated.

I wanted to share with you some of his thoughts and summarize them in bullet points. Before I do, I want you to know I came away with the understanding that we are on the right planning track with the changes and allocations we are making inside our clients’ portfolios.

We also agree with and are watching what Phil stresses are 6 determining factors to occur between August and October this year. He said that these 6 points were critical markers he called FLAGS, which will indicate the direction and outcome of the market.

Here are the 6 market forces we should watch for:

1. The Federal Open Market Committee (FOMC) meeting on September 17-18. This will be the time in which we will see if the Federal Reserve will begin their “tapering’ plan. Phil believes this indicator will show the market whether the FOMC is truly seeing an improving economy or if their support is needed at its high level. He believes that if it does not occur in September that it will be announced in December’s meeting. Phil said this indicator will show the market that economic factors are improving and the need for the continued heavy support by the Federal Reserve can be reduced. If this occurs, he believes that the stock market has an upside opportunity for a year-end push and that each of us should be positioned correctly within the bond sector.

2. Mr. Bernanke replacement. President Obama must announce his choice for the new chairman of the Federal Reserve by September-October. His decision will either be one of harmony and continuity or one that creates discourse. Harmony and continuity, Phil says, keeps the trains on the track, while a controversial candidate create uncertainty and we all know the market does not like uncertainty.

3. Germany’s Federal Election on September 22nd. We now live in a world market where our economy is affected by other actions and elections. The outcome of Germany’s election and those remaining in power or new to the position will either promote an open market and trade or discourage it. To maintain and have an open trading partner with Germany will be important to the U.S.’s stock market success.

4. Continuing Resolution. In October Congress will need to address and decide on the Continuing Resolution. In March, President Obama signed a stopgap spending bill to keep the government running through the end of September. As this time frame comes to an end, this must be addressed.

5. Need to increase the debt ceiling. We all have seen how Congress works nowadays. Last minute panic decisions and pointing fingers are the norm for these days. Phil says he expect the same, but sees it getting done at the final hour. This could be good for the market.

6. The Middle East. This is Phil’s wildcard and most “in your face” flag. We know and have seen what is going on in Syria. We have heard of President Obama’s “red line” on Syria. Bottom line a conflict in the Middle East could not be good for the equity market and if it lasted a long time it could be BAD for the equity market. So we must wait and see, and hope and pray proper decisions are made.

So there you have it, Phil Orlando’s 6 factors to watch for in the coming months. Let me say again Phil was optimistic that we will see the proper outcomes. But as any good economist he was truthful with us on what is out there. We, along with Phil, will continue to watch for the signs.

Thanks again for our clients, guests who attended and especially for Phil for taking so much time to discuss these important issues with us. Let me encourage each of you to take advantage of the next event we host. We believe it is well worth your time.


• Federated Investments is not affiliated with HMC Partners or LPL Financial.

• *The opinions voiced in this material are for general information only and are not intended to prove specific advice or recommendations for any individual. To determine which investments(s) may be appropriate for you, consult your financial advisor prior to investing. Securities provided through LPL Financial. Member FINRA/SIPC. • The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

• No investment strategy can guarantee success or protection against loss. Investing involves risk, including loss of principal.