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Market Update: 8-28-17

Jerris Wealth Management Group LPL Research Weekly Market Update

CORPORATE BEIGE BOOK: UPBEAT AS EXPECTED

Burt White Chief Investment Officer, LPL Financial | Jeffrey Buchbinder, CFA Market Strategist, LPL Financial

The LPL Research Corporate Beige Book Barometer — our measure of corporate sentiment that reflects an analysis of earnings conference call transcripts — shows that companies remained generally upbeat during the second quarter earnings season. This is hardly a surprising outcome, given actual earnings results were very good and estimates of future earnings held up relatively well as companies provided forward-looking guidance. Earnings call transcripts analyzed took place starting in mid-July extending through the third week of August.

Market Update: 8-21-17

Jerris Wealth Management Group LPL Research Weekly Market Update

TAKING A LITTLE RISK OFF THE TABLE

Burt White Chief Investment Officer, LPL Financial | Jeffrey Buchbinder, CFA Market Strategist, LPL Financial

We think it is a good time to consider taking a little risk off the table. Two weeks ago we wrote about how stocks are probably due for a pullback given their steady advance and some of the risks facing markets. This past week (August 16), we slightly reduced equity exposure in some of our model portfolios. By doing so, we acknowledged that those risks had begun to stack up during a seasonally weak period and that the trade-off between upside potential and downside risk, at least in the near term, had become a bit less favorable. This week we discuss some of the details behind that tactical decision and reiterate our positive longer-term view. Disclaimer: Today’s eclipse did not play a role in the tactical asset allocation decision discussed in this report.

Market Update: 8-14-17

Jerris Wealth Management Group LPL Research Weekly Market Update

BOTTOM LINE: IMPRESSIVE EARNINGS SEASON

Burt White Chief Investment Officer, LPL Financial | Jeffrey Buchbinder, CFA Market Strategist, LPL Financial

Corporate America delivered another outstanding earnings season, with double-digit earnings growth, solid upside to forecasts, and generally upbeat outlooks from corporate management teams. We have been particularly impressed with the breadth of earnings gains and upside to revenue forecasts. Strong earnings continue to provide support for the stock market at elevated valuations, with the potential for more support from a reduced corporate tax rate next spring. Here we provide an overview of the nearly completed second quarter 2017 earnings season.

Market Update: 8-7-17

Jerris Wealth Management Group LPL Research Weekly Market Update

BUY THE DIP? WHAT DIP?

Burt White Chief Investment Officer, LPL Financial | Jeffrey Buchbinder, CFA Market Strategist, LPL Financial

Buy the dip? What dip? Beyond the double-digit gains in stocks this year1 and all of the all-time highs (29 for the S&P 500 Index already this year), perhaps the biggest story for the S&P 500 in 2017 is the absence of pullbacks. Here we discuss the lack of pullbacks, what could cause the next one, and how technical analysis could help us decide whether to buy the dip.

Whether you look at the number of trading days since the S&P 500 has pulled back 5% (279 days), or just 3% (187 days), it has been an unusually calm and steady advance. The streak without a 3% pullback, pictured in Figure 1, is particularly noteworthy as it has only been matched once since 1950. From January 1995 through January 1996, the S&P 500 went 241 trading days (about two weeks short of a full calendar year) without a 3% pullback. The early stages of the technology boom, Federal Reserve (Fed) rate cuts, falling market interest rates, and low (at least for that period) and stable inflation all played a role in the stock market’s steady move higher during that period.

Market Update: 7-31-17

Jerris Wealth Management Group LPL Research Weekly Market Update

IS POLICY SKEPTICISM CREATING A SMALL CAP OPPORTUNITY?

Burt White Chief Investment Officer, LPL Financial | Jeffrey Buchbinder, CFA Market Strategist, LPL Financial

We believe small caps are becoming an increasingly attractive tactical opportunity. The primary reason for our optimism is the amount of skepticism toward the Trump administration’s ability to move its policy agenda forward, particularly with regard to tax reform. Small cap stocks bene t disproportionately from a lower corporate tax rate because of their more domestic focus. We still think tax reform will be passed in early 2018 despite widespread skepticism, though likely a slimmer version than the Trump administration and congressional leaders have proposed. Here we discuss the opportunity in small cap stocks that may be developing as skepticism builds.

Market Update: 7-24-17

Jerris Wealth Management Group LPL Research Weekly Market Update

TAX REFORM PIVOT?

Burt White Chief Investment Officer, LPL Financial | Jeffrey Buchbinder, CFA Market Strategist, LPL Financial

Is it time for the tax reform pivot? Earnings season will get a lot of attention this week (July 24–28) with 190 S&P 500 Index companies slated to report, as will the Federal Reserve with its two-day policy meeting concluding on Wednesday, July 26 (though we do not expect any big news). Just as important for markets is the Republicans’ latest unsuccessful attempt to reform healthcare, which means that we are closer to the pivot toward tax reform.

This week, given the latest healthcare developments in Washington, D.C., we share our updated thoughts on tax reform’s prospects and some implications for the healthcare sector.

Our Team

Susan Jerris

Susan
Jerris

LPL Registered Principal 
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CA Insurance License #0662706
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Anthony Roble

Anthony
Roble

LPL Registered Administrative Assistant
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CA Insurance License #0K61923
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Diana Esperon

Diana
Esperon

Administrative Assistant
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