Market Commentary for the week of June 5, 2017

The Markets

Despite May’s weak jobs report and revised, lower jobs numbers for March and April, all three major indexes closed at records Friday. Technology and industrial stock gains led the increase. For the week, the Dow rose 0.69 to close at 21,206.29. The S&P gained 1.01 percent to finish at 2,439.07, and the NASDAQ climbed 1.54 percent to end the week at 6,305.80.

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.

They Are Not Done Yet — Between now and the end of 2018, the Federal Reserve has 13 scheduled meetings. The median estimate of Federal Open Market Committee policymakers suggests five separate rate hikes of 0.25 percent each will occur by Dec. 31, 2018. The next Fed meeting is June 13-14 (source: Federal Reserve, BTN Research).

Breakeven — The three summer months (June, July and August) have produced an average loss of 0.1 percent (total return) for the S&P 500 stock index over the last 25 years, i.e., 1992-2016 (source: BTN Research).

Too Pessimistic — An annual survey of Americans 65 or older gave the U.S. stock market at least a 50 percent chance of rising in the upcoming year only one time over 12 surveys conducted from 2002-2013. The U.S. stock market (as measured by the S&P 500) was actually up 10 of the 12 years (down in 2002 and 2008), gaining 105 percent (total return), an average of 6.2 percent per year (source: University of Michigan, 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 June 2017. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#1812832.1