Stock markets are off to a strong start in 2017 fueled by healthy earnings growth. As companies in the S&P 500 index begin to report their results for the 1st quarter, aggregate sales and earnings growth are currently up 4.4% and 13.2%, respectively, when compared to last year.
While much of the credit for this market surge has been attributed to the optimism for new pro-growth polices, such as corporate tax cuts and reduced regulations, we began to observe improvements in the economic environment prior to November. According to the data, the U.S. economy has been accelerating since the middle of last year and continues to do so without any fiscal policy assistance. Should this administration successfully deliver on even part of the promised agenda, it should only add to the progress we have seen in economic growth and corporate earnings.
Will stocks continue to climb?
As long as this trend of accelerating economic growth persists, we remain optimistic and anticipate a positive investment climate for much of 2017.
Current conditions create an environment that historically bodes very well for stocks, especially for growth-oriented sectors, like technology. Combined with high ranks for projected earnings growth and relative strength, we favor the tech sector to be a leading category this year.
How Can We Help?
At GGM, aligning your investments with the prevailing economic environment is just one of the ways we strive to add value to your portfolio. If you are concerned about whether your investments are primed for the current market and allocated to meet your objectives, we recommend our complimentary portfolio checkup. Contact us today!