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Market Update: 6-5-17

Jerris Wealth Management Group LPL Research Weekly Market Update

MASTER LIMITED PARTNERSHIP
MORE GOING ON THAN OIL PRICE

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

Master limited partnerships (MLP) appear to be a natural way to invest in the changing energy landscape. MLPs are exclusively focused on energy infrastructure in the United States and Canada. North American energy production has become a dominant factor in the price of oil and in the North American drive to be energy independent. Yet, the pricing and performance of MLPs can be complicated, influenced by systemic factors, such as the prices of oil and gas, interest rates, and movement in the equity markets. MLPs are also influenced by the degree of success of each individual partnership, in the same way that traditional stocks’ performances are determined by both market and individual factors. Despite recent performance, we believe that the sector may still represent a good long-term investment option to potentially profit from increased North American energy production.

Market Update: 5-30-17

Jerris Wealth Management Group LPL Research Weekly Market Update

CORPORATE BEIGE BOOK: IT KEEPS GETTING BETTER

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

After a very strong first quarter earnings season, we expected to see management sentiment also improve. And similar to how earnings results and the guidance from management were better than we expected, so was our measure of corporate sentiment based on earnings conference call transcripts, which we call our Corporate Beige Book. We saw a sharp increase in the strong and positive words over the prior quarter, with no change in the weak and negative words. There was virtually no talk of recession — as expected — and far less attention was paid toward potential policy changes out of Washington, D.C.

Analysis of earnings conference call transcripts from calls that took place starting in mid-April extending into the third week of May.

Market Update: 5-22-17

Jerris Wealth Management Group LPL Research Weekly Market Update

FOCUS ON FUNDAMENTALS

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

What are we telling our investors? Focus on fundamentals. It was an up-and-down week for stocks as market participants became increasingly worried that the Trump administration’s agenda was in danger following the latest news surrounding the Russian investigation. On Wednesday (May 17), the S&P 500 Index suffered its biggest one-day drop in nearly a year (-1.8%), while the Nasdaq Composite (-2.6%) and Russell 2000 Index (-2.8%) suffered even bigger losses.

Stocks then recovered nicely Thursday and Friday (May 18–19) to end the week with only a modest loss, the S&P 500 falling 0.4% for the week. As hard as it is to believe, the index is still less than 1% off its all-time closing high [Figure 1]. Some attributed the late-week rebound to the market’s approval of former FBI Director Robert Mueller as special counsel for the Russia investigation. Perhaps markets got more comfortable with where the investigation might lead. More good economic and earnings data probably helped; it’s difficult to know. But whatever the reason for the rebound, this week we focus on the market’s fundamentals which look pretty good.

Market Update: 5-15-17

Jerris Wealth Management Group LPL Research Weekly Market Update

EARNINGS UPDATE: RAISING THE BAR

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

Excellent earnings season but bar will soon be raised. First quarter earnings season has been excellent by almost any measure. Results beat expectations by more than usual. The overall growth rate is very strong, even without the big boost from energy. The ratio of companies lowering versus raising second (current) quarter earnings forecasts is well above average and guidance has provided better- than-usual support for analysts’ estimates for the balance of 2017. In total, these are all good things.

While we do not want to rain on the well-deserved earnings parade, two potential headwinds are worth noting. One, the comparison to depressed first quarter 2016 earnings was very easy and the bar will be raised over the next several quarters. Two, market participants generally expect fiscal policy to begin to provide an earnings boost around New Year’s, an expectation that has become increasingly tenuous as healthcare reform, other competing priorities, and various distractions have pushed the timetable back.

Market Update: 5-8-17

Jerris Wealth Management Group LPL Research Weekly Market Update

FIVE REASONS NOT TO SELL IN MAY

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

“Sell in May and go away” is probably the most widely cited cliché in stock market history. May is upon us, which sparks a barrage of Wall Street commentaries, media stories, and investor questions every year about the popular stock market adage. This week, we tackle this widely cited seasonal pattern, but focus on some reasons it might not work this year.

Market Update: 5-1-17

Jerris Wealth Management Group LPL Research Weekly Market Update

REFLECTING ON NASDAQ 6,000

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

The Nasdaq Composite hit 6,000 last week, more than 17 years after first reaching 5,000 in March 2000. The road from the first break above 5,000 to the 6,000 milestone was a long one. During the internet boom in the late 1990s, moves from 3,000 to 4,000 and 4,000 to 5,000 were quick, at 56 and 71 days respectively, before the long and winding road to 6,000 over the course of 6,256 days [Figure 1]. But after the 15-year journey back to 5,000 was completed in 2015, the Nasdaq traversed the next 1,000 points relatively quickly to break through the 6,000 level on April 25, 2017.

Even at the big round number of 6,000, the Nasdaq stands on a much stronger foundation today than it did 17 years ago leading up to the dotcom crash. While achieving this milestone has sparked more bubble discussions in the media, here we make the case that Nasdaq stocks are far from bubble territory by comparing various valuation and sentiment measures in today’s market with those back in March 2000.

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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