Weekly Market Updates

The Markets (as of market close April 14, 2017)

With the United States and many global markets closed for Good Friday, stocks ended the short trading week lower. Trading volumes were low for much of the week, as investors may be concerned with rising tensions overseas in Syria and North Korea, and the continuation of strained diplomatic relations with Russia. Of the indexes listed here, only the Dow's losses were under 1.0%. On the other hand, the Russell 2000 and Nasdaq suffered the largest dips, falling 1.42% and 1.24% respectively.

The price of crude oil (WTI) increased last week, closing at $52.91 per barrel, up from the prior week's closing price of $52.29 per barrel. The price of gold (COMEX) continued to climb, closing at $1,290.10 by late Friday afternoon, up from the prior week's price of $1,256.10. The national average retail regular gasoline price increased to $2.360 per gallon on April 3, 2017, $0.045 higher than the prior week's price and $0.277 more than a year ago.

The Markets (as of market close April 7, 2017)

Stocks gave back the prior week's gains as each of the indexes listed here lost value by last Friday's market close. The small-cap Russell 2000, which had gained over 2.0% the prior week, fell over 1.5% and is once again in danger of falling below its year-end closing value. Energy stocks rallied midweek, riding the increase in oil prices. However, that surge wasn't enough to keep the large-cap Dow from falling back a bit. The labor report, while positive, came in well below expectations, which may have dampened investor enthusiasm by the close of the markets last Friday.

THE STOCK MARKET’S FINAL FOUR FACTORS

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

The NCAA College Basketball Final Four is set. Gonzaga, North Carolina, Oregon, and South Carolina are headed to Phoenix, Arizona 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 2017: 1) economic growth, 2) earnings, 3) corporate tax reform, and 4) the Federal Reserve (Fed). We expect a hard-fought battle between these factors and market risks, including a policy mistake from a government or central bank, trade protectionism, and geopolitics.

CHECKING IN ON SOME TRUMP TRADES

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

Checking in on some “Trump trades.” The election outcome and resulting expectations for fiscal policy have caused several shifts in market leadership toward areas most sensitive to these policies. Policy is not the only factor to consider when evaluating these investments, but it is a very important one. Here we discuss some of these so-called “Trump trades,” including small cap stocks and the financials and industrials sectors.

WILL THIS SIXTEEN BE SWEET?

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

The “Sweet 16” is set. So in the spirit of March Madness and an exciting NCAA college basketball tournament that has already brought us two shockers in second round exits by Duke and Villanova, we have compiled our “Sweet 16” for the stock market. Specifically, we have identified 16 keys—many of them policy related—for stocks for the remainder of the year [Figure 1] and assessed their implications for the market. While the path for several policy-related areas is uncertain, we still expect a solid year for stocks in 2017—potentially even slightly above our year-end S&P 500 target of mid-single-digit gains,* depending on that policy path. Look for a deeper dive into some of these market drivers in our “Final Four” next week.

HOW MUCH IS LEFT IN THE TANK?

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

Last Thursday, March 9, 2017, the bull market celebrated its eighth birthday. During that eight-year period, the S&P 500 Index tripled in value including dividends, producing a total return of 314% (19.2% annualized) while rising 250% in price. So how much might the current bull have left in the tank? Given we are not seeing the warning signs that have historically signaled the ends of past bull markets, we would not be surprised if the current bull market celebrates its ninth birthday one year from now. This week, we look at some of our favorite bull market indicators.