Stocks continued to move higher and have increased five weeks in a row as the Dow Jones Industrial Average closed at a record high on Friday. Helping stocks move higher has been a better-than-expected earnings season, as the blended earnings growth rate for the S&P 500 is nearly 5%, and about 66% of companies have reported earnings above analyst estimates. International stocks also rose as better-than-expected manufacturing data was reported in the eurozone. Better economic growth and earnings growth support rising stock prices, but there is uncertainty regarding upcoming policy changes, which could cause volatility. Rebalance your portfolio to the appropriate mix of stocks and bonds to stay prepared for higher volatility.
Another week, another tally in the win column for the stock market. As we move forward, it will be important that the improvement in the underlying fundamentals keeps pace with the market. If that's the case, 2017 can be another solid year for investors. In our view, the short-term is unlikely to be as smooth as it's been recently, and a longer-term perspective will be required as the market's path becomes choppier. Fortunately, the underpinnings of this market remain favorable, in our view. Here are four things that happened last week that are worth noting:
Source: 1. Bloomberg, as of 2/24/17. 2. Bloomberg, including the Markit US Manufacturing PMI index
|Dow Jones Industrial Average||20,822
|S&P 500 Index||2,367
|10-yr Treasury Yield||2.31%||-0.10%||-0.13%|
Next week, January's retail sales will be reported on Tuesday. On Wednesday, vehicle sales and construction-spending data will be released.
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