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Market Update: 10-16-17

Jerris Wealth Management Group LPL Research Weekly Market Update

THE 1987 CRASH: A NOT SO HAPPY ANNIVERSARY

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

This week marks the 30th anniversary of the 1987 stock market crash in what has come to be known as Black Monday. The Dow plunged more than 22% on that day — the equivalent of a more than 5,000-point drop today — while markets around the world suffered severe declines as well. Here we look back at the crash, draw some comparisons to today’s market environment, and offer some comfort to those who may fear a repeat.

Market Update: 10-09-17

Jerris Wealth Management Group LPL Research Weekly Market Update

THIRD QUARTER 2017 EARNINGS PREVIEW - SLOWER BUT STILL SOLID

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

Third quarter earnings season gets underway this week (October 9–13) and it should be another good one. The S&P 500 Index has exceeded earnings expectations 33 straight quarters and we see no reason why the third quarter won’t make it 34. However, as seen in Figure 1, earnings growth should fall short of the stellar results and double-digit pace of the past two quarters. We don’t like to lead with the negatives, but some of the reasons earnings growth may slow down this quarter include: ƒƒHurricane impacts. The most visible impact of the devastating hurricanes (Harvey and Irma) late in the third quarter can be seen in insurance company earnings estimates. The property casualty industry within the financials sector may have to absorb more than $100 billion in insured losses during the quarter, which is why financials earnings are expected to fall. Disruptions in other industries in the affected areas (Florida and Texas) such as retail and oil and gas production add to the challenge.

Market Update: 10-02-17

Jerris Wealth Management Group LPL Research Weekly Market Update

MARKETS BUYING INTO TAX REFORM

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

Last week’s tax proposal presented real progress. For much of this year we have been espousing what has felt like a minority view — that Republicans would reach some sort of tax agreement in early 2018. After last week, that view may have become the majority — even if only a slight one — as key tax policy players in Washington, D.C. put out a framework with more details. The plan is geared toward securing votes from the most conservative wing of the Republican Party and appears to have achieved its objective. Here we share some implications of that proposal and explore what some market-based barometers of tax reform show.

Market Update: 9-25-17

Jerris Wealth Management Group LPL Research Weekly Market Update

THE BULL MARKET APPEARS ALIVE AND WELL

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

The steady bull market—now the second largest—continues. The Dow just had its third nine-day win streak of 2017, which hasn’t happened within a single year since 1955. Can the rally continue? While longer-term technicals do look very healthy, a closer look suggests that it has been a historically long time since even a modest correction, thus increasing the chances of a rise in volatility soon.

Market Update: 9-18-17

Jerris Wealth Management Group LPL Research Weekly Market Update

UPDATE ON GROWTH AND VALUE STOCKS

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

Growth has been on a roll. Based on the Russell 3000 style indexes, growth’s 18% year-to-date gain is 14% ahead of value’s 4% advance. Looking further back, this growth outperformance is nothing new. Over the past 10 years, including the entire financial crisis period of 2008 and 2009, growth has outpaced value by about 50% [Figure 1], representing the longest period of growth outperformance since style indexes began to gain a following about 40 years ago. Using Fama-French* data back to the 1930s, before the Russell indexes were created, this is the longest bull market ever for growth stocks. Due to this observation setting off contrarian alarm bells in our heads, this week we discuss the potential for a value rebound.

Market Update: 9-11-17

Jerris Wealth Management Group LPL Research Weekly Market Update

STRONG EUROPEAN EARNINGS ARE KEEPING EUROPE CHEAP

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

After years of diminished earnings ended in the third quarter of 2016, European companies have begun seeing sustained growth in their bottom lines. Ultimately, earnings drive stock prices, but the market is always trying to look forward; having strong earnings is not enough if the growth is fully priced in. That is the fundamental question with regard to stock market valuation — what are you paying for future earnings? Solid earnings in Europe are keeping price-to-earnings ratios (PE) static, while PEs on domestic stocks have been rising. This makes European equities increasingly attractive; however, currency remains a concern, as much of the recent performance of European stocks has been due to a strong euro relative to the dollar.

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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