Market and Economic Commentary - IMVA Market and Economic Commentary - IMVA

Market and Economic Commentary

 

2nd Quarter 2017
Summary: Overview

The U.S. economy continues to expand, albeit at a moderate sub-3% rate, driven by a synchronized global expansion and rebound from a manufacturing recession.  Indications do, however, show the probability of hitting a soft-patch, given recent data.

After three years of flat earnings, S&P 500 companies delivered index earnings at the best year-over-year rate since 2011 and are on target for high single-digit to low double-digit 2017 earnings growth.

With 30% of aggregated S&P 500 company revenues originating from international markets, the global expansion has provided a favorable tailwind driving revenue and earnings growth for U.S. multinationals.

The technical condition of the market remains supportive of current prices.  The Cumulative Advance/Decline line continues to make new highs along with price.  However, the market advance may be ripe for a pause or correction; many stocks screen as overbought presently.

Volatility across assets, and in particular for equities, has declined and stayed remarkably low YTD.  Periods of low volatility are generally linked to the business cycle; low unemployment rates tend to anchor equity volatility.

Download the full report in pdf here: IMVA Investment Review – July 2017

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