Download 01-03-2017 Weekly Market Review

Good morning!
The S&P 500 gained +12.0% last year (total return), including +5.0% since the surprising November 8 th election. In spite
of legions of stock market doubters, the index (which represents 77% of the total US market capitalization) has now
produced a positive return for 8 years in a row, 13 of the last 14 years, and 40 of the last 50 years. Its 50-year average
annual return is +10.2%, buoyed by an ongoing stock bull market that will reach 8-years in length in just 2 months
(source: BTN Research).
The 115th session of Congress begins today, with Republicans in control of the Senate (52-48) and the House (241-194).
When Donald Trump takes office in 2 ½ weeks, he will become the first Republican to enjoy that level of Congressional
support at the beginning of his first term in office since Dwight Eisenhower in 1953. Our incoming president, author of
the 1987 book “The Art of the Deal,” will attempt to run the White House like a business, a style that long-time
Washington insiders have scoffed at from the early days of the Trump campaign (source: Congress).
Trump’s political success has set the table for the 2017 campaigns of nontraditional candidates across multiple European
countries. Voters backing right-leaning candidates will go to the polls in March (the Netherlands), April (France) and in
the fall (Germany), hoping to ride the wave of populism that carried Donald Trump to power in America (source: BTN
Research).
Notable Numbers for the Week:
1.
UP vs. DOWN - The split between “up” and “down” trading days for the S&P 500 over the last 50 years (i.e., 1967-2016, a total of
12,586 trading days) is 53% “up” and 47% “down.” The split during calendar year 2016 (over a total of 252 trading days) was 52/48
(source: BTN Research).
2.
TEN-YEAR NOTE - The yield on the 10-year Treasury note ended 2016 at 2.44%, just 0.17 percentage points higher than the 2.27% it
finished at as of 12/31/15. The yield on the 10-year note was 2.57% on 8/05/11, the day S&P downgraded the USA’s top-rating that it
had held for 70 years (source: Treasury Department).
3.
HOUSING - The average interest rate nationwide on a 30-year fixed rate mortgage was 4.32% at the end of 2016. The record low
national average was 3.31% as of 11/22/12 or just over 4 years ago (source: Freddie Mac).
4.
OIL PRICES - The price of oil ended 2016 at $53.72 a barrel, up +45% (and $16.68 a barrel) from its 2015 closing price of $37.04. From
a 6/20/14 closing price (i.e., 2 ½ years ago) of $107.26 a barrel, the price of oil had fallen 76% as of 2/11/16 ($26.21) before doubling to
$53.72 by the end of 2016 (source: CME Group).
01/03/17 Tuesday
Investment advisory services offered through Private Capital Group, LLC, a Registered Investment Advisor.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is
based on data gathered from what we believe are reliable sources. It is not guaranteed by Private Capital Group, LLC as to accuracy does not purport to be complete and is not intended to be
used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The indices mentioned are unmanaged and
cannot be directly invested into. Past performance does not guarantee future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative
of the US stock market. Copyright © 2014 Michael A. Higley. All rights reserved
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