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Market Update: 2-13-17

Jerris Wealth Management Group LPL Research Weekly Market Update

REAL ESTATE OVERVIEW: ALL ABOUT THE CYCLES

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

Analyzing real estate is all about the cycles. Evaluating real estate investments, including real estate investment trusts (REIT), depends on evaluating three cycles: the economic cycle (primarily jobs), the building cycle, and the interest rate cycle.

We believe we are in a good spot in the economic cycle for attractive U.S. real estate returns, with steady job gains and an improving domestic economic growth outlook. The building cycle for real estate shows little sign of the type of overbuilding that has ended previous cycles. Finally, although we expect interest rates to rise, we expect increases to be modest, and for the increases to be driven by improving economic growth and a gradual pickup in inflation, conditions historically favorable for real estate stocks.

Based on these metrics, our real estate outlook is favorable, especially for income investors in the case of REITs. Below we discuss these cycles and what they mean for publicly-traded real estate in 2017.

Market Update: 2-20-17

Jerris Wealth Management Group LPL Research Weekly Market Update

EARNINGS UPDATE: FIVE OBSERVATIONS

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

Fourth quarter earnings results are mostly in the books. It was not a blowout quarter by any stretch—earnings growth is tracking to about 7.5%, according to Thomson Reuters, only a below-average 1.5% improvement on the estimate at the start of the reporting quarter. But 7.5% earnings growth, along with 5% revenue growth, is nothing to sneeze at [Figure 1]. Further, policy optimism on Wall Street and among corporate management has helped full-year estimates for 2017 hold up relatively well. This week, we share five observations about fourth quarter earnings season so far.

Market Update: 2-6-17

Jerris Wealth Management Group LPL Research Weekly Market Update

TAKING STOCK OF TECHNICALS AND SENTIMENT

Burt White Chief Investment Officer, LPL Financial | Ryan Detrick, CMT Senior Market Strategist, LPL Financial | Dave Tonaszuck, CMT Technical Strategist, LPL Financial

With the historically weak month of February upon us, we take a closer look at market technicals and sentiment this week. Although equities are near all-time highs, longer-term technicals continue to look very strong. We will show how market breadth continues to suggest the path of least resistance for stocks is higher. Broad market sentiment is showing some signs of excessive optimism, which could act as a near-term contrarian warning sign. These are only near-term concerns though, as we still aren’t seeing the type of over-the-top sentiment seen at major market peaks.

Market Update: 1-23-17

Jerris Wealth Management Group LPL Research Weekly Market Update

INTERNATIONAL STOCKS WE LOOK EAST TO JAPAN

Burt White Chief Investment Officer, LPL Financial | Matthew E. Peterson Chief Wealth Strategist, LPL Financial

After years of earnings recession, improving corporate earnings and relatively low valuations are making overseas investments more attractive. For the all consternation over and discussion of geopolitical and macro-economic issues, what ultimately drives stocks everywhere are corporate earnings, and earnings almost everywhere are increasing. Furthermore, analysts’ estimates of future earnings have also been increasing, despite lingering uncertainties around the impact of the Brexit vote and the U.S. election. We have already seen a dramatic increase in earnings for emerging markets (EM) in 2016, while 2017 expectations for both EM and developed market stocks, as measured by the MSCI EAFE Index, continue to improve. The biggest positive surprise may be coming from Japan as its market climate restructures. Valuations are generally attractive on both an absolute and relative basis across most markets. We have been relatively constructive on EM for most of 2016 and are now looking at other international markets.

Market Update: 1-30-17

Jerris Wealth Management Group LPL Research Weekly Market Update

IS THERE STILL VALUE IN VALUE?

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

Despite a strong 2016, there may still be some value in value. While value has lagged growth so far in 2017, based on the Russell style indices [Figure 1], we see several reasons to like value stocks, including accelerating economic and profit growth, and an improving outlook for the financial sector. But the growth side has enough going for it that we recommend investors maintain balance across the styles. Here we discuss our latest style views.

Market Update: 1-17-17

Jerris Wealth Management Group LPL Research Weekly Market Update

IS SMALL CAP STRENGTH SUSTAINABLE?

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

Small caps have surged since Election Day. As shown in Figure 1, the small cap Russell 2000 Index has outperformed the large cap S&P 500 by 8.1% since November 8, 2016. The relative strength has been driven by several election-related factors, including prospects for corporate tax reform, deregulation, and President elect Donald Trump’s efforts to encourage U.S. manufacturing and discourage offshoring. Here we share our thoughts on the potential policy impact on small caps and discuss whether recent small cap strength is sustainable.

Our Team

Susan Jerris

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Jerris

LPL Registered Principal 
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Anthony Roble

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Roble

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

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Esperon

Administrative Assistant
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