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Hovering Near the Highs

Weekly Commentary, 12/12/16 to 12/16/16

Stock prices finished the week mixed but still hovering near all-time highs. The Dow Jones Index closed at 19,843, up +0.44% and flirting with the 20,000 milestone throughout the week. The S&P 500 lost -0.06% and the Russell 2000 gave back -1.73% of its recent gains. The narrative remains the same, with expectations of Trump’s fulfilling promises for less regulation stimulating U.S. economic growth and corporate profits, as well as inflation. The S&P 500 is up +8% since the election and +13% (including dividends) year-to-date.

The Federal Open Market Committee concluded their final meeting of the year by raising rates for the second time in a decade. As expected, they raised the target range on Fed Funds by 25 basis points. The Federal Reserve showed increasing optimism about the economy, pointing to a strengthening labor market and inflation moving toward targeted levels. Fed officials now expect to raise rates by another 0.75%, likely in three 0.25% moves, in 2017. Bond yields began rising before the election and have continued the climb. From bottoming in July at 1.39% the yield on the benchmark U.S. Treasury 10-year note now yields 2.59%.   

We believe, equity market technicals and fundamentals remain supportive for equity prices. At some point the Trump enthusiasm may wane and market sentiment could shift amid questions surrounding the implementation of Trump policy particulars. 

We will continue to focus on seeking proper asset allocation for client portfolios in any market environment.


Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. The investment strategies presented are not appropriate for every investor and financial advisors should review the terms and conditions and risks involved. Stadion’s actively managed portfolios may underperform during bull markets. Some information contained herein was prepared by or obtained from sources that Stadion believes to be reliable. There is no assurance that any of the target prices or other forward-looking statements mentioned will be attained. Any market prices are only indications of market values and are subject to change. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock price. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. It is the most widely quoted measure of the overall performance of the small-cap to mid-cap company shares. It is not possible to invest directly in indexes (like the S&P 500) which are unmanaged and do not incur fees and charges. The U.S. 10-Year Treasury Note is a debt obligation issued by the United States government that matures in 10 years. The Sharpe ratio measures the excess return per unit of deviation, or risk. The core personal consumption expenditures index measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices. Any references to specific securities or market indexes are for informational purposes only. They are not intended as specific investment advice and should not be relied on for making investment decisions.

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Past Performance is no guarantee of future results. Investments are subject to risk, and any of Stadion's investment strategies may lose money.