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.

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