Investment Review - October 2017
- The major U.S. stock indexes gained in September. The Dow Jones Industrial Average increased by +2.1%, the S&P 500 was up +2.1% and the Nasdaq Composite advanced +1.1%.
- Third quarter earnings estimates are likely too low with earnings estimates rising just +3.7% on expected revenue growth of 4%. Stocks began to rally mid-August as better than anticipated growth prospects appeared likely. The rally into earnings season may leave stock reaction muted as companies report, repeating a trading pattern seen in the first and second quarters of the year.
- Oil prices gained traction as demand growth exceeded production, thereby, drawing down global inventories. Supply has declined this year as OPEC members have generally complied with lower production targets and the U.S. rig count slightly declined. Higher spot prices for the commodity may encourage additional production, keeping a lid on oil’s ability to further appreciate.
Sources: Bloomberg LLC, FactSet, U.S. Department of Labor
* This commentary reflects the opinions of Welch & Forbes based on information that we believe to be reliable. It is intended for informational purposes only, and not to suggest any specific performance or results, nor should it be considered investment, financial, tax or other professional advice. It is not an offer or solicitation.
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