INSIGHTS

On January 18, 2018

Bull Market is Alive and Well

• Looking toward 2018, we expect the S&P 500 to gain 13-17% and eclipse 3100, with an increase in volatility.

• We expect the Federal Reserve to raise rates three times with the yield on the 10-year U.S. Treasury approaching 3% over next 12-18 months.

• Within U.S. equities, we believe:

• technology and materials sectors should continue to outperform


• financials should shine in 2018


• energy stocks and MLPs (Master Limited Partnerships) deserve attention after hitting near-term lows in August and November 2017


• consumer staples and utilities may struggle relative to the market

• We also expect commodity prices to continue to respond positively to accelerating global economies.

• Lastly, within equities, we favor small/mid cap over large and international (both developed and emerging) due to higher expected earnings growth rates and relative valuations.

• For income investors, we favor alternative forms of income over duration including select deeply discounted closed-end funds, high quality dividend-paying equities and MLPs.

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