Stocks off to a ‘good start’ in 2017, what’s next?

Posted by | April 4, 2017 | Newsletters | No Comments
Exclusive Content

If you are a client, sign in below to access exclusive content.

 

With the first quarter of 2017 now behind us, we have seen the three major indexes all gain more than 4.5% so far this year.1 In fact, the NASDAQ just experienced its best quarter since 2013 due to tech stocks driving growth.2

Despite closing down on Friday, the indexes added to their quarterly gains last week. The S&P 500 grew by 0.80%, the Dow was up 0.32%, and the NASDAQ gained 1.42%.3 At the same time, international stocks in the MSCI EAFE lost 0.26% for the week.4

What else happened last week?

Oil gained on word from OPEC

Oil prices experienced their largest weekly gains in 2017, ending above $50 a barrel.5 This growth is largely a result of speculation that OPEC (an intergovernmental organization of 13 oil-producing countries) will continue its agreement to curb oil output.6 By reducing supply, the nations aim to reduce the supply glut that drives prices down.

Q4 GDP increased with revisions

The final revisions for fourth quarter GDP beat expectations, coming in at 2.1%—up from the previous estimates of 1.9% growth.7 This plodding growth is in keeping with the economic recovery we have experienced the past several years.

Inflation hit a key Fed benchmark

When deciding on monetary policy, the Federal Reserve pays close attention to the PCE deflator, an inflation measurement from the Bureau of Labor Statistics.8 They want to see this data above 2%. We learned last week that in February the PCE deflator hit this level for the first time since 2012.9 If this trend continues, we could see additional interest rate increases this year.10

Consumer confidence and sentiment remained high

The Conference Board’s March readings for consumer confidence jumped to the highest levels since December 2000, surprising economists who expected the reading to decline from February.11 The University of Michigan’s consumer sentiment readings also showed an increase for March.12 However, the Michigan survey’s chief economist pointed out that participants’ sentiment showed a deep partisan divide.13 With confidence and uncertainty seemingly split along party lines, the effect on spending behaviors remains to be seen.14

So far, the first quarter of 2017 has brought market growth and several positive economic data reports—coupled with heated policy debates occurring in government and the media. Moving forward, we will continue to seek the best opportunities to pursue your goals and keep you informed with the information you need to help make solid decisions.

I appeared on Fox Business last week, and the segment made ‘Editors pick’!

We covered concepts from my latest book, Investing Strategies for Retirement.

WATCH THE CLIP

 

Sources

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC