Economy
Valuation
Sentiment
U.S. Economy—As reported by The Conference Board, consumer confidence is at its highest level since Nov. 2000.
- We expect 2018 real U.S. GDP to grow at about a 2.5%-3.0% rate. In our opinion, the probability of a U.S. recession is low.
- Based on the Federal Reserve Bank of Philadelphia’s U.S. Coincident Index, our gauge of U.S. economic activity (above left) registers a December 2017 reading in the 42nd percentile.
- Recent developments:
- In his first
public appearance as Fed Chair, Jerome Powell told lawmakers the Fed would balance the need to guard against
excessive inflation with the benefits of allowing the economy to enjoy the “tailwinds” of tax cuts and strong global growth.
Capital Markets—After falling 292 points between 1/26 and 2/8, the S&P 500 regained 133 points by month end.
- Valuation:
- Based on the S&P 500 trailing 12-month price-to-earnings ratio, our gauge of U.S. equity valuation (above center) registers a current reading in the 13th percentile.
- Sentiment:
- Based on the National Association of Active Investment Manager’s Exposure Index, a contrarian indicator, our gauge of U.S. stock market sentiment (above right) registers a Februrary 28, 2018 reading in the 27th percentile.
This material is not intended to be relied upon as a forecast, research, or investment advice, and is not a recommendation, offer, or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed to be reliable, are not necessarily all-inclusive, and are not guaranteed as to accuracy. Reliance upon information in this material is at the sole discretion of the reader.