Market View Update – September 2017

When thinking about how to start a market view update, it is often helpful to pick up where the last one left off. Alas, that is what we will do.
In mid-June, we wrote that the stock market has continued to defy calls for a correction and has held its ground time and again in the face of scary-sounding headlines due to the stabilizing force of strong earnings growth and the persistence of low-interest rates.
We said at the time that, if there were to be a destabilizing force for the stock market, it would be disappointing earnings growth and/or rising interest rates that lessen the relative appeal of owning equities. That was an observation by the way and not a forecast.
Since that time, market participants have learned that second-quarter earnings increased 10.4%, per FactSet, well above the estimated growth rate of 6.6% in front of the reporting period, and have seen the yield on the benchmark 10-year note tick up slightly to 2.20%, which is still 28 basis points lower than where it started the year.

This post was published at FinancialSense on 09/19/2017.