Market Performance: How Are U.S. And European Markets Starting 2017?

| About: SPDR S&P (SPY)


U.S. equity markets continue their post-election honeymoon period.

U.S. jobs for December deliver solid numbers.

Does solid performance from developed and emerging markets point toward more possible upside?

It's been a happy new year for markets so far in 2017. Will it continue?

In this week's episode, Director, Client Investment Strategies, Mark Eibel joined Todd LaFountaine, program director, advisor insights, to take a close look at the first week of market activity in 2017 and projections for the coming months.

Eibel called the recent positive reaction of U.S. equity markets a "honeymoon period," and noted that U.S. markets tend to rise between presidential elections and actual presidential inaugurations. Eibel encouraged investors to focus more closely on data and market fundamentals.

That data includes U.S. non-farm payroll jobs numbers for December, which came in at approximately 156,000 - a solid number from Eibel's point of view. U.S. wages also moved up, and markets seemed to have responded positively to those data points. On the more negative side, the relatively high valuation of U.S. equities may be creating more of a headwind for continued market growth.

Non-U.S. equity markets: Another honeymoon?

Around the globe, both developed and emerging markets are also having a good start to the year. Eibel noted that the valuations of equities in these markets are comparatively lower than U.S. equities. Looking forward, Russell Investments strategists predict eurozone equities to have earnings growth potential in the 5-10% range for 2017. Additionally, the currencies in many of these markets are weaker than the U.S. dollar, making their exports less expensive as well.

What happens once Trump is sworn in as president?

Eibel noted that President-elect Trump will soon become President Trump. The moment that happens, the markets will begin paying close attention to his ability to fulfill the campaign promises that seem to have helped move U.S. markets up. Eibel stated that the potential for disappointment may also create a potential for a downward market move.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Interviews were filmed as of the date mentioned in the video, these views are subject to change at any time without notice based upon market or other conditions and are current as of that date.

This is not an offer, solicitation or recommendation to purchase any security or the services of any organization.

Investing in capital markets involves risk, principal loss is possible. There is no guarantee the stated outcomes in the presentation will be met. The video may contain forecasting or other forward-looking information, this information is inherently uncertain and may be incorrect.

The information, analyses and opinions set forth herein are intended to serve as general information only and should not be relied upon by any individual or entity as advice or recommendations specific to that individual entity. Anyone using this material should consult with their own attorney, accountant, financial or tax adviser or consultants on whom they rely for investment advice specific to their own circumstances.

This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments.

Russell Investments’ ownership is comprised of a majority stake held by TA Associates with minority stakes held by Reverence Capital Partners and Russell Investments’ management.

Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.

Copyright © Russell Investment Group, LLC. 2016. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an "as is" basis without warranty.

Date of first use: January, 2017

About this article:

Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here