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Press Room: Markets & Economy

The Economy: December 2017

THE ECONOMY: As of December 2017

A good December capped off a great year for stock markets. In fact, thanks to last month’s 1.11% rise, the S&P 500 actually provided positive performance for all 12 months of 2017! International and emerging markets were similarly consistent, with only one down month on the year for each. On the domestic policy front, President Trump signed sweeping tax legislation, which should boost corporate earnings in 2018. Also, the Federal Reserve raised the federal funds rate another quarter point to its new range between 1.25 – 1.50%

The Economy: November 2017

THE ECONOMY: As of November 2017

U.S. stocks rallied strongly towards the end of November, as corporate tax reform began to look more and more like a reality. The S&P 500 rose 3.07%, bringing its year-to-date gain to 20.49%. International and emerging market equities turned in decent performance as well, up 1.05% and 0.20%, respectively. Despite the continued favorable stock market trends, there has been little movement in longer-term interest rates. The 10 year treasury yield seems unable to break above the mid-2.4% range, ending the month at 2.42%. Next month, the Federal Reserve is expected to raise the federal funds rate another quarter of a percentage point.

The Economy: October 2017

THE ECONOMY: As of October 2017

Typically one of the worst months of the year for stocks, this past October was anything but. The S&P 500 rose 2.33%, bringing its year-to-date gain to nearly 17%. The technology sector continued its winning ways, with the NASDAQ up 3.61% for the month and just over 26% thus far through 2017. Not to be outdone, emerging market equities rallied as well, and have now delivered 32.26% on the year! President Trump announced his nomination of Jerome Powell for Federal Reserve Chair beginning in 2018. Mr. Powell has similar views on monetary policy compared to the outgoing Janet Yellen, so we don’t expect many changes to current course of policy in the near-term.

The Economy: September 2017

THE ECONOMY: As of September 2017

Financial market strength continued in September, capping off a 3rd quarter in which most asset classes registered healthy gains. U.S. stocks fared well, with the S&P 500 up 2.08%. Small cap securities, as measured by the Russell 2000, were even better, rising an impressive 6.24%. Emerging market stocks took a breather, pulling back about half a percent over the past month, but have still gained nearly 30% for the year. In a bit of a surprise, the Federal Reserve indicated that one more interest rate hike in December was still the most likely course of action, despite relatively muted inflation.




“Keep it 100,” that’s what all the kids are saying on social media these days. But what in the world does it mean? Just when we think we’ve begun to understand the differences between Instagram and Snapchat, millennials start talking in code. Anyhow, urban dictionary defines the phrase as “staying true to oneself…no matter what anyone else thinks.” As it so happens, the U.S. economy is now entering its 100th month of expansion. And this long-running growth has been largely driven by Americans staying true to themselves, doing what it is that they do best – buying stuff! In the second quarter of this year, for example, consumer spending grew 3.3 percent, a nice rebound from just 1.1 percent in the first quarter. This helped overall GDP increase at a solid 2.3 percent annual rate through the first half of the year. Back-to-back severe hurricanes make recent data more difficult to interpret; still, these positive underlying trends look stable, with the Atlanta Fed currently pegging third quarter growth at 2.5 percent.

Read the Full Commentary: 3Q 2017

The Economy: August 2017

THE ECONOMY: As of August 2017

Second quarter U.S. GDP got a nice revision, coming in at a 3 percent annual rate versus the previous estimate of 2.6 percent. On the other hand, geopolitical events, especially a number of missile tests by North Korea, led to increasingly volatile financial markets. The S&P 500, however, still managed to eke out a 0.31 percent gain in August. Emerging markets continued their hot streak, gaining 2.23 percent for the month, bringing year-to-date returns up to nearly 30 percent! Gold moved higher and treasury yields turned lower amidst the hectic stock market. The 10-Year U.S. Treasury yield ended August at 2.12 percent.

The Economy: July 2017

THE ECONOMY: As of June 2017

After an impressive first six months of 2017, it is only natural for stock market investors to wonder if we’re due for some type of correction. But more often than not, strength in the year’s first half begets more strength in the second half. We have just a month of evidence, but this proved true in July, with most major markets recording further gains. The S&P 500 was up 2.06%, led by a number of good earnings reports. More impressive were markets outside of the U.S. International and Emerging Market equities that delivered gains of 2.88% and 5.96%, respectively.

Quarterly Market Commentary: Second Quarter 2017



As we enter the second half of the year, the U.S. economic expansion is now in its 97th month, the third longest on record. For comparison, the average expansion since 1900 has lasted just shy of four years, or 47 months to be exact. Given how far beyond that average we currently are, a natural inclination is to wonder just how much longer this can go on. Aren’t we due for a recession or some type of pullback? Not necessarily in our opinion. In fact, when looking at the length of historical business cycles, there has been a substantial increase in their typical duration as the economy has matured. For example, the average length of the 18 expansions from 1900 – 1980 was a mere 36 months. But what about the five cycles from 1980 through the present? 76 months. From that perspective, our present situation doesn’t seem near as worrisome. Economists often refer to these types of differences as a “regime change.” More specifically, a regime change is a distinct shift in the characteristics of certain economic phenomena in one time frame compared to a previous one. In this case, business cycles have evolved from stronger, but briefer expansions, to cycles that may now be more-muted, but longer lasting. None of this is to say that the business cycle is dead, or we needn’t worry about another recession – neither is the case, no matter how badly central bankers wish it was. Thus, it’s not simply the passage of time itself, but rather the strength, or lack thereof, for economic fundamentals.

Read the Full Commentary: 2Q 2017

The Economy: June 2017

THE ECONOMY:  As of June 2017

Halfway through 2017, and it’s been mostly good news for financial markets. The S&P 500 is up 9.34 percent already, and the technology-heavy NASDAQ has gained 14.71 percent. After years of subpar returns, international markets have come to life as well, with the MSCI EAFE and MSCI Emerging Markets rising 13.81 percent and 18.43 percent, respectively. The Federal Reserve increased the federal funds rate another quarter-point at their last meeting, and also hinted at potentially shrinking the size of its balance sheet later this year. So far though, this has had little effect on longer-term bond yields. At 2.27 percent, the 10-Year Treasury Yield is still much closer to its yearly lows than to its high of 2.61 percent back in March.

The Economy: May 2017

THE ECONOMY: As of May 2017

International stock markets continued their solid performance in May, buoyed by an improving European economy and favorable results in the recent French presidential election. The MSCI EAFE Index was up 3.67 percent for the month and has gained an impressive 14.01 percent for the year. Though the political environment here in the U.S. is rather hectic presently, it hasn’t put a damper on financial markets. The S&P 500 rose 1.41 percent in May and is up 8.66 percent year-to-date. More important than any news out of Washington is the fact that companies are enjoying solid earnings growth. With most of the first quarter data reported, it looks like this was the best yearly increase in profits since 2011.