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May 1 2017

It was a good week to own stocks.

Not all financial news was good news last week, but that didn’t prevent U.S. stock markets from moving higher. Barron’s reported on the good news:

“This past week, welcome political news from Europe, a batch of stellar corporate-earnings reports, and a concrete tax proposal to cut corporate and some personal rates sharply gave the bull even more reasons to rally. By Friday’s close, the Dow Jones industrials and other market measures were standing near all-time highs.”

Overall, corporate earnings were quite strong during the first quarter of 2017, according to FactSet. With 58 percent of the companies in the Standard & Poor’s 500 Index reporting in, earnings are showing double-digit growth for the first time since 2011.

That’s exhilarating news for investors.

Economists had less to celebrate. The Commerce Department’s first estimate indicated the U.S. economy got off to a slow start during 2017. Gross domestic product (GDP), which measures the value of all goods and services produced, came in below expectations and grew at the slowest rate in three years. Bloomberg reported:

“The GDP slowdown owes partly to transitory forces such as warm weather and volatility in inventories, which supports forecasts for a rebound as high confidence among companies and consumers and a solid job market underpin growth. Even so, the weakness at car dealers could weigh on expansion, and further gains in business investment could depend on the extent of policy support such as tax cuts.”

Keep an eye on Congress and the Federal Reserve. Changing fiscal and monetary policies are expected to have a significant influence on markets and the economy.

Sources:
http://www.barrons.com/articles/poll-top-money-managers-favor-tech-finance-1493438722
https://insight.factset.com/hubfs/Resources/Research%20Desk/Earnings%20Insight/EarningsInsight_042817.pdf
https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
https://www.bloomberg.com/news/articles/2017-04-28/u-s-economy-expands-at-slowest-pace-in-three-years

  • Data as of 4/28/20171-WeekY-T-D1-Year3-Year5-Year10-Year
  • Standard & Poor’s 500 (Domestic Stocks)0.0150.0650.1490.0850.1130.049
  • Dow Jones Global ex-U.S.2.39.59.6-0.73.1-1.1
  • 10-year Treasury Note (Yield Only)2.3NA1.82.71.94.6
  • Gold (per ounce)-1.29.30.8-0.8-5.26.5
  • Bloomberg Commodity Index0.1-4-1.8-15.4-9.9-7
  • DJ Equity All REIT Total Return Index-2.336.89.89.85

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

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Bart A Zandbergen, CFP® is a Registered Investment Advisor with Optivest, Inc and a Registered Representative with Gramercy Securities, Inc. Investment advisory services are offered by Optivest, Inc. under SEC Registration and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC, 3949 Old Post Road, Charlestown, RI, 02813, 800-333-7450.

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