December 11, 2017 – Weekly Market Commentary



 

Capitol Hill - Market Commentary

Lauren Fox – CNN
Congress Moves Government Shutdown Deadline Two Weeks LaterSummary: The House and Senate voted on a short-term spending bill which will keep the government running until December 22nd. Republicans are focused on making their own party happy in order to secure the 60 Senate votes needed to pass a bill. Points of contention include DACA funding and defense spending.
 

American Flag - Market Commentary

Akin Oyedele – Business Insider 
Jobs Report Crushes Expectations as Hurricane Impact FadesSummary: The US added 228,000 jobs in November, significantly exceeding estimates of 195,000. The unemployment rate remained at 4.1%. Wage growth was weaker than expected. Average hourly earnings rose 0.2% month to month and 2.5% year over year. The combination of low unemployment and stagnant wages has been positive for stocks because it indicates a strong economy without the threat of excessive inflation. 
 

Federal Reserve Logo - Market Commentary

Binyamin Appelbaum – The New York Times
Fed, Perplexed by Low Inflation, Is Still Ready to Raise RatesSummary: The Fed is poised to raise rates again this week. Strong economic data and low unemployment should outweigh concerns over stagnant inflation. 2017 is on pace to be the sixth straight year with inflation tracked below the Fed’s two percent target. 
 

Schwab Logo - Market Commentary

Liz Ann Sonders, Jeffrey Kleintop, Brad Sorensen – Charles Schwab
The Big Picture Heading into 2018Summary: A strong finish to 2017 is likely to lead to a strong start to 2018. Although volatility may rise early in the year, the Schwab team believes that any pullback or correction would be a healthy development in an ongoing bull market. The economy is still on the right track, but excessive optimism could lead to investors setting expectations too high for next year. Failing to meet rising expectations could lead to more frequent pullbacks in 2018. 
 

BlackRock Logo - Market Commentary

Russ Koesterich, CFA – BlackRock
Will Tax Cuts (finally) Reawaken Value?Summary: Value stocks are cheap relative to growth and tax cuts may lead to a rebound in value performance. Underlying metrics such as return-on-equity and profitability indicate that value stocks are trading at a historically wide discount to growth names. Tax cuts are expected to lead to higher nominal growth, which would lead to higher inflation, both of which are catalysts for value stock performance. 

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