Monthly Market Brief-May 2017

Each month, our Heritage Investment team publishes a market brief to provide an overview of the major factors influencing the US economy, including a summary of key sectors and the current positives & challenges.

Click Market Brief May 2017 for May 2017 updates.

Here are some key highlights:

POSITIVES:

  • The April employment report surprised to the upside as the U.S. economy added 211,000 jobs
  • Increased earnings growth along with slowly rising interest rates still make equities look relatively more attractive
  • With revenue surprises ex-financials the highest since 4th quarter 2014, company EPS growth in the 1st quarter 2017 has not been driven by cost cutting efforts alone
  • Even with a strengthening U.S. dollar, growth prospects abroad suggest international exposure remains attractive

CHALLENGES:

  • With equity and bond valuations running above average levels, investors should adjust near-term return expectations
  • With a lack of investment in new equipment and relatively soft innovation, productivity throughout the expansion has remained low
  • Because wage pressure is lacking, income growth remains relatively soft; thus, expectations for a big consumer spending spree in the 2ndquarter of 2017 seems unlikely