LPL Research’s Mid-YearOutlook 2017: A Shift in Market Control

June 15, 2017 | posted in: Blog, Financial Insights | by
Hot off the press this morning, and a must-read!

The report recaps where we’ve been so far this year, and looks at what forces are driving the market as we head into the second half of the year.

For a look at what forces are driving current markets, click here to check out LPL Financial’s Mid-Year Outlook: 2017 – A Shift In Market Control.

Key takeaways from the report include:

The gauges say the growth engine for the U.S. economy and markets is changing. Monetary policy is powering down, business fundamentals are powering up, and fiscal policy and economic growth are on the verge of being taken off standby. The Fed has shown increasing trust that the economy has recovered and that market forces can keep it steady. Consequently, we look for fiscal policy to supplement corporate profits as the market’s next drivers. In general, consumers and businesses feel pretty good about economic conditions. Consumer and business confidence is high, likely providing the next boost to consumption and investment.

But attempts at a full transfer away from monetary policy have stalled some, evident in headlines in the media about how the Trump administration’s agenda may be in danger. Stock market leadership has turned away from those areas of the market best positioned to benefit from the proposed fiscal policies. The latest stall could push the key fiscal policy pillars into 2018, or possibly derail them. The odds still favor corporate tax reform being achieved, while prospects for the rest of the agenda may become tenuous.

It is important for investors to appreciate the implications of a new stock market driver. Much like a portfolio can benefit from diversification, the economy and markets can benefit from different drivers working at different times. As monetary policy powers down, business fundamentals power up, and we wait for fiscal policy to help get the U.S. economy off of standby mode, we hope LPL Research’s Midyear Outlook: A Shift In Market Control will enable you to identify opportunities that may arise, navigate the challenges that will inevitably come, and help you stick to your long-term investing plan.

 

This is a great time to make an appointment for a financial portfolio checkup, so don’t hesitate to call our offices today!