Broker Check
First Quarter 2017 In Review

First Quarter 2017 In Review

| April 13, 2017

FIRST QUARTER 2017 IN REVIEW

GOOD DATA AND POLICY HOPE LEAD TO STOCK MARKET STRENGTH

  • U.S. economic growth has improved in Q1, though hard versus soft data remains a question. Based on data received through March 2017, 1st quarter economists' consensus of real gross domestic product growth is 1.8%; following 2% growth in the 4th quarter of 2016, 3.5% in the 3rd quarter, and 1.4% in the 2nd.
  • Strong start to 2017 for U.S. stocks.  The S&P 500 posted an impressive 6.1% total return during the 1st quarter, the 6th consecutive quarterly advance.
  • Long-term rates moderate as markets await policy specifics.  The Treasury yield curve flattened as short-term yields rose due to the Fed rate hike in March, while long-term rates moderated and gradually declined over the quarter.
  • Equity centric alternative investment strategies led quarterly returns.  The HFRX Equity Hedge Index gained 2.7%, as strategies benefitted from the broader equity market rally, as well as the more favorable stock-picking environment on both the long and short side.
  • Energy and agriculture declines dragged commodities index lower.  The broad Bloomberg Commodity Index slid 2.3% during the 1st quarter, driven lower by declines in energy - both oil and natural gas - and agriculture.

A LOOK FORWARD :

We expect mid-single-digit returns for the S&P 500 in 2017, consistent with mid-to-late economic cycle performance, supported by earnings acceleration and improved U.S. economic growth.