Perspective, Provided

A Guided Path Informs Your Decisions

December 4, 2017 |
Market Flash Report - December 2017

Heading into the final month of 2017, the S&P 500 continues on the course of impressive gains. The index has posted a positive return for 11 of the 11 months so far this year, despite the headline noise from North Korea, tax reform uncertainty and other geopolitical events. A strong Q3 GDP estimate was revised upwards, and continued strength through Q4 is expected. The economy keeps chugging along helped by high consumer confidence, low unemployment, and stabilized oil prices. All signs point to another Fed rate increase at the December FOMC meeting. This would be the fifth increase in two years - bumping the range to 1.25 - 1.5%. Markets are currently pricing in a high likelihood of a rate hike, even though inflation remains slightly below the Fed's target. The House and Senate have both passed their versions of tax reform, but uncertainty still remains on how the differences between the two proposals will be reconciled. Although lower corporate taxes would likely provide a boost to stocks by increasing earnings, it’s important to note that the economy has been growing, even absent additional benefits of a tax cut. Increased earnings growth along with historically low interest rates continue to make an attractive case for investing in growth assets.