If you feel like “déjà vu all over again,” to quote Yogi Berra, you’re not mistaken: US and international stocks rose during the 3rd quarter, bringing returns in the high teens over the past year, including dividends. Here at home, the stock market’s performance is underpinned by favorable fundamental factors: interest rates and inflation remain low, and growth in per-share earnings remains robust, at about 10% to 12%, year-over-year.
Global capital markets were broadly higher in the second quarter, continuing the trend from Q1. Within our typical client portfolios, 10 of 12 asset classes notched positive returns for the quarter (your own portfolio results may differ – please refer to your Quarterly Portfolio Review Report).
U.S. stocks continued their march higher during 2017’s first quarter. The S&P 500, an index tracking the 500 biggest companies traded on US stock markets, was up over 6% in the quarter, and is up more than 17% over the past 12 months (including the reinvestment of dividends).
U.S. equity markets pushed broadly higher in Q4 and for calendar 2016, boosted by investor optimism that President-elect Trump’s administration will usher in a wave of business-friendly initiatives including reduced government regulation and lower corporate tax rates.
In economic news, it was pretty much more of the same. The US economy continued to grow at a tortoise pace during the 3rd quarter. On a positive note, wage growth is accelerating and residential real estate values continue to increase around the country, which bodes well for the future.
With the benefit of a month’s hindsight, market fallout from the Brexit campaign appears surprisingly short-lived, particularly in the U.S. Following a brief selloff in the few days following the June 23rd vote, the S&P 500 rallied over 8% in the next few weeks, hitting a fresh all-time high by early July. European equities, while still modestly negative for the year, also regained much of the ground lost after the Brexit vote.