THE STOCK MARKET’S FINAL FOUR FACTORS
John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial
The NCAA Men’s Tournament Final Four is set. Kansas, Loyola, Michigan, and Villanova are headed to San Antonio, Texas to determine this year’s college basketball national champion. In that spirit, following our “Sweet 16” commentary last week, this week we share our “Final Four Factors” for the stock market in 2018: economic growth, earnings, trade policy, and the midterm elections.
While we expect a hard-fought battle between these factors and with it, more market volatility, we still see the potential for solid gains for stocks this year and maintain our year-end fair value S&P 500 Index target of 2950–3000. We prefer cyclical portfolio positioning, where appropriate, favoring financials, industrials, technology, small caps, and emerging markets...