Wednesday, August 2, 2017

August 2017


July 2017 saw the SPX rise 1.90%. 
The 10-year treasury​ ended the month about where it started at 2.29% yield. 
The renamed Bloomberg Barclays Intermediate Credit Index was unchanged
for the month.  Q2 preliminary GDP was estimated at +2.6%. Earnings for SPX companies, according to Thomson Reuters are expected to rise 11% for the quarter, following a 15% increase in the first quarter.  Sales are expected to rise 5%, the second biggest increase in more than five years.
We continue to see ​GDP growth around 2% for another year. Inflation is under 2%.
Interest rates remain low with no wage pressure or commodity pressure. The inflation adjusted federal funds rate continues to be negative. ​ Washington gridlock means the existing rules of the road remain unchanged. If Republicans in Congress can agree on lower individual & corporate taxes, an infrastructure plan, or repatriation of overseas cash, corporate earnings will rise further​.
Dollar weakness has been a boon to U.S. multinationals. We also have improving economies and earnings in both Asia and Europe as well as many developing countries. In sum, the global and domestic backdrop supports rising stock prices. While many anticipate a short-term correction in the traditionally weak August to September period, the trend of higher equity prices is likely to
continue for the balance of 2017. ​

Enjoy the rest of your summer.

Communication is for informational purposes only & doesn't constitute offer to sell or a solicitation of an offer to purchase any interest in any investment vehicles managed by CFA or an associated person or entity. CFA does not accept any responsibility or liability arising from the use of this communication. No representation is being made that the information presented is accurate, current, or complete, and such information is always subject to change without notice. We do not provide legal, accounting or tax advice. Any statement regarding legal, accounting or tax matters was written about the explanation of the matters described herein & not intended or written to be relied upon by any person as definitive advice. Any discussion of U.S. tax matters contained within this communication is not intended to be used and cannot be used for avoiding penalties that may be imposed under applicable Federal, state or local tax law or recommending to another party any transaction or matter addressed.

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