Market Commentary for the week of January 30, 2017

The Markets

U.S. stocks edged lower Friday following disappointing fourth-quarter reports. Some corporate earnings fell short of expectations, and U.S. GDP increased at a 1.9 percent annual rate, compared to the third quarter’s 3.5 percent increase. For the week, the Dow rose 1.34 percent to close at 20,093.78. The S&P gained 1.04 percent to finish at 2,294.69, and the NASDAQ climbed 1.90 percent to end the week at 5,660.78.

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

Has Been Lower — Inflation, as measured by the Consumer Price Index, advanced 2.1 percent during 2016. Inflation in 2015 (0.7 percent) and 2014 (0.8 percent) were two of the three lowest rates of annual inflation in the United States in the past 50 years, i.e., 1967-2016 (source: Department of Labor, BTN Research).    

Huge — The U.S. stock market was worth $25.3 trillion as of Dec. 31, 2016. The S&P 500 comprises 80 percent of the total U.S. stock market capitalization as of Dec. 31, 2016, equal to $20.2 trillion (source: BTN Research).

Most Ever — Americans purchased a record 17.55 million new cars and light trucks in 2016, the sixth consecutive year of increasing sales for the U.S. auto industry (source: Autodata, BTN Research).

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright January 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1696456.1