Resources

Market Data Bank

3Q 2016


Click image to enlarge

ECONOMY AND STOCKS STRONG
The Standard & Poor’s 500 returned 3.9% in 3Q2016, after a 2.5% return in Q2. Prices for America’s largest companies rose amid positive economic reports. After a yearlong recession in earnings, a recovery in
earnings on is forecast, as one of the longest economic expansions of the last century continues. 

 

 


Click image to enlarge

A GREAT FIVE YEARS
After trading sideways for 18-months — and three double-digit plunges — stocks settled into a slightly higher range in 3Q2016. In the five years ended Sept. 30, the S&P 500 total return was an incredible 113%, a doubling. Without dividends reinvested, the S&P 500 gained 92%, spectacular by historical standards.

 


Click image to enlarge

TELECOM SERVICES LEAD
Telecom was the No. 1 sector, with a 26.8 gain. Tech shares surged, as risky investments were rewarded. After month after month of positive economic data, industrials and materials stocks shot up . Financials suffered, as ultra-low interest rates made it hard for banks to profit on loans.

 


Click image to enlarge

INDEXES TRACKING ASSET CLASSES
The S&P 500 index’s total return of 113% over the past five years is more than double the 41% on the S&P Global index excluding U.S. stocks. This chart shows the resilience demonstrated by the U.S. economy after the severe global recession compared to the rest of the world’s economies. Crude oil and commodities crashed.

 


Click image to enlarge

THIS EXPANSION VERSUS OTHERS
At 89 months, the current expansion is neither young nor old compared to the previous growth cycles since World War II. Stock prices may bounce up and down by 10% or even 15%. However, the fundamentals of the economy are strong. This expansion could go on for many years, and could increase in strength.

 


Click image to enlarge

S&P 500 INDEX VS. EARNINGS¥
To be conservative, the dotted red line shows the trajectory of the S&P 500 stock index if stocks were to trade at 17 times earnings based on the most recent consensus estimates by Wall Street analysts. The dotted red line at the top right of this chart paints a pretty picture.

 

Past performance of investments is not a very reliable indicator of future performance. ± Indices and ETFs representing asset classes are unmanaged and not recommendations for any specific investment. Foreign investing involves currency and political risk and foreign-country instability. Bonds offer a fixed rate of return while stocks fluctuate. Leading economic indicators from the Conference Board. S&P 500 earnings bottom-up operating earnings per share for 2015 (actual), 2016 (estimated) and 2017 (estimated) as of November 1, 2016: $117.46; for 2016, $117.86; for 2017, $133.01. Sources: Yardeni Research, Inc. and Thomson Reuters I/B/E/S survey of consensus estimates. Standard and Poor’s for index price data through November 25, 2016; and actual operating earnings data through 2015.

 

 

 

 

 

 

INDEX OF MARKET DATA BANK

This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by Advisor Products Inc., to provide information on a topic that may be of interest Advisor Products is not affiliated with the named broker-dealer, state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Indexes are unmanaged baskets of securities that are not available for direct investment by investors. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. All investments involve risk, including loss of principal. ©2017 Advisor Products Inc. All Rights Reserved.

Navigation Links

Tell a friend

Tell A Friend about the information you found on our website!

Contact Details

15455 Dallas Parkway
Suite 1325

Addison, TX 75001

Phone: 972-980-PLAN

Fax: 972-980-7859

This email address is being protected from spambots. You need JavaScript enabled to view it.

Broker Check

Check the background of this firm and investment professional on FINRA's BrokerCheck.