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Market Update: 12-18-17

Jerris Wealth Management Group LPL Research Weekly Market Update

WHEN OVERBOUGHT IS BULLISH

John Lynch Chief Investment Strategist, LPL Financial | Ryan Detrick, CMT Senior Market Strategist, LPL Financial

The bull market continues to march higher. The S&P 500 Index is near one of the most overbought levels in history and this has many wondering how much longer the rally can continue. The longer-term technical indicators continue to look strong, but sentiment is flashing some warning signs suggesting market volatility could finally be heating up.

Market Update: 12-11-17

Jerris Wealth Management Group LPL Research Weekly Market Update

CORPORATE BEIGE BOOK UPBEAT AS EXPECTED

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

Companies remained generally upbeat during the third quarter earnings season, based on the LPL Research Corporate Beige Book Barometer. This is hardly surprising, given actual earnings results were good again and estimates of future earnings held up relatively well as companies provided forward-looking guidance.

Market Update: 12-04-17

Jerris Wealth Management Group LPL Research Weekly Market Update

2018 STOCK MARKET OUTLOOK: DOUBLE-DIGIT RETURNS?

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

Back to business: fundamentals to drive stock market gains in 2018. With a focus on business fundamentals and the impact of fiscal policy, the return of the business cycle means that earnings growth may have to shoulder most, if not all, of the load if stocks are going to produce attractive returns in 2018. The good news is the S&P 500 Index may be well positioned to generate earnings growth at or near double-digits in 2018 thanks to a combination of better economic growth and potentially lower corporate tax rates, despite some possible downward pressure on profit margins from higher wages. We also expect the stock market’s price-to-earnings (PE) multiple, at 19.5 times trailing earnings, to hold steady (or drop slightly) in 2018, as the economic cycle ages, inflation picks up modestly, and central bank policy tightens further*. Risks to our stock market forecast include Congress failing to pass a tax agreement (a low risk after Senate passage over the weekend), a potential policy mistake by a central bank, and political uncertainty around the midterm elections.

Market Update: 11-06-17

Jerris Wealth Management Group LPL Research Weekly Market Update

MLP WEAKNESS APPEARS OVERDONE

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

Master limited partnership (MLP) weakness appears overdone. The Alerian MLP Index has lost 9.3% in 2017 year to date, well behind the S&P 500 Index’s 17.5% return and even the energy sector’s 6.3% loss. More recent performance is particularly surprising given the 30% rally in WTI crude prices since June 21, 2017 — the Alerian MLP Index has been flat over that roughly 4.5-month period, while the S&P 500 has returned 7%. In an environment where many investments look stretched, this is one that has lagged behind and could offer potentially more upside. Here we discuss several reasons the group has struggled and make the case that it may be due for a turnaround.

Market Update: 11-13-17

Jerris Wealth Management Group LPL Research Weekly Market Update

PRESIDENT TRUMP’S FIRST YEAR

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

Last week marked the one-year anniversary of President Trump’s Election Day victory. The period since the president was elected has been one of the best ever for U.S. stock markets. The 28.5% rally in the Dow Jones Industrial Average (Dow) one year after the election ranks 4 out of 31 overall among one-year post-election rallies for U.S. presidents since the inception of the Dow in 1896 [Figure 1] and is one of the best performances since World War II (WWII). The best? President Coolidge during the Roaring Twenties. The worst? Woodrow Wilson’s second term during WWI.

Market Update: 11-20-17

Jerris Wealth Management Group LPL Research Weekly Market Update

HIGHLIGHTS FROM ANOTHER STRONG EARNINGS SEASON

John Lynch Chief Investment Strategist, LPL Financial | Jeffrey Buchbinder, CFA Equity Strategist, LPL Financial

Corporate America delivered another outstanding earnings season. S&P 500 Index earnings are tracking to an 8.2% year-over-year increase for the third quarter with just a handful of companies left to report. Excluding the impact of hurricanes within the insurance group, corporate America produced its third straight quarter of double-digit earnings growth. The amount of upside to earnings estimates was slightly below average in the quarter, but we consider the season a success given the strong upside to revenue forecasts, along with generally upbeat outlooks from corporate management teams. The consistency with which companies have beaten estimates is particularly impressive, even when considering the historical pattern of consensus estimate reductions that give companies a lower bar. Earnings have beaten consensus estimates for 34 consecutive quarters, covering much of the current economic expansion (based on Thomson data).

Our Team

Susan Jerris

Susan
Jerris

LPL Registered Principal 
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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
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