What email address or phone number would you like to use to sign in to Docs.com?
If you already have an account that you use with Office or other Microsoft services, enter it here.
Or sign in with:
Signing in allows you to download and like content, and it provides the authors analytical data about your interactions with their content.
Embed code for: La Pointe Commentary 6-9-17 (99 Months!)
Select a size
La Pointe Commentary
June 9, 2017
99 Months !
The Economy - The ongoing bull market for the S&P 500 stock index has reached 99 months in length (8 years and 3 months) as of the close of trading last Friday, June 9th. In my last commentary I explained that a big reason for the unusually long rate of the expansion had much to do with the very slow rate of growth. This is one of the weakest expansions in history. I compared it to the INDY 500 being driven at only 100 miles an hour would make for a very long race (in terms of time).
It is hard to believe that it has been 8 years since the bottom of the real estate fiasco. Many of us were very worried about the future of the economy. The markets were reeling and the belief of many was that “chicken little” just might actually be right this time. But what has actually happened? The resiliency of the American economy has come through. Quarter after quarter, the American economy grew, albeit slowly.
Today, with more than 90% of S&P 500 companies having reported first quarter 2017 results, S&P 500 earnings are tracking to a solid year-over-year increase of more than 14% (Thomson Reuters data). That mark, should it stand throughout the remainder of reporting season, would represent the best pace of earnings growth since the third quarter of 2011. Further, outlooks from corporate management teams have generally been upbeat. Corporate America’s ability to produce strong profits despite sub-par economic growth has been impressive, providing a solid backdrop for stocks and economically sensitive bonds.
The story is similar overseas, where improving earnings have provided support for solid gains in international developed and emerging markets.
Like stocks, bonds have generally rewarded investors so far in 2017. However, a move higher in rates is still very much on the table for this year, as economic growth is expected to improve, though any increase may be gradual depending on what fiscal stimulus is enacted. Though further gains in the bond market in 2017 may be muted, high-quality fixed income can still play an important role in portfolios as a diversifier and to help manage risk.
Looking ahead, stocks will have their ups and downs, as they always do, but improved corporate profits provide a solid foundation for potential further gains despite the U.S. economy’s slow start to the year.
The global economic picture has improved.
On the Personal Side- There is another birthday in the family today. Last Friday was Bryce’s birthday! The staff decorated his office with all kinds of stuff and true to his birthday wishes, we had a pizza party. Those of you that know Bryce shouldn’t be surprised. Happy Birthday Bryce, we love you!
David La Pointe
Registered Principal, LPL Financial
Securities Offered Through LPL Financial * A Registered Investment Advisor * Member FINRA/SIPC
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
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.
Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.
Data is taken from sources generally believed to be reliable but no guarantee is given to its accuracy.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
This research material has been prepared by LPL Financial LLC