January 2, 2018 – Weekly Market Commentary


American Flag - Market Commentary

Patrick Gillespie – CNN Money
U.S. Consumer Confidence Remains Near 17-Year high

Summary: Consumers are expecting Republican’s fiscal reforms along with a strong job market and stock market to continue supporting a strong economy heading into 2018. According to the Conference Board, the number of consumers planning to make big-ticket purchases in the next six months hit its highest level since 1978, and over 60% of people surveyed intend to take a vacation in the next 6 months, both are signs of economic optimism. 


Shopping Mall - Market Commentary

Nia Williams – Reuters
U.S. Crude Ends Year Above $60 on Strong Global Oil Demand

Summary: US crude oil prices rose above $60 for the first time in over two years. Declining inventories and an increase in demand led to a 12% gain in crude prices last year. Crude production in the US hit a 46-year high in October, but an increase in exports and domestic demand, along with production limit compliance by OPEC countries supported price gains. 


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John Butters – Factset
Double-Digit Earnings Growth, High Profit Margin Projected for S&P 500 in 2018

Summary: The estimated earnings growth rate for the S&P 500 in 2018 is about 12%. According to analyst estimates, all 11 sectors are expected to report year-over-year earnings growth with energy, materials, and financials leading the way. Analysts are also predicting the highest net profit margin for the S&P 500 in the last 10 years at 11%. 


Bloomberg Business - Market Commentary

Ray Dalio – Bridgewater Associates
The Tax Bill is Good for the Economy – but it isn’t Hitting our Biggest Weaknesses

Summary: The recently passed tax plan will have a positive short-term effect on the economy, but Dalio does not believe that it does enough to deal with major impediments that are holding back US productivity. Dalio advocates for infrastructure and educational reform to help boost long-term US growth. While restructuring corporate taxes may make the US a more attractive place to do business, the benefits are small relative to what could be achieved by focusing on infrastructure and education, both of which more directly boost productivity. 


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John Mauldin
Economy On a Roll

Summary: According to Mauldin, the economy is unlikely to slow down significantly over the near-term unless a major external shock occurs or the Fed overreaches when raising rates. The Fed will likely be able to continue raising rates next year without negatively affecting the economy because of the boost that many individuals and companies will receive due to tax-reform. 





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