Stock markets continued their bullish advance in the 1st quarter of 2017. Large cap benchmark Standard & Poor’s 500 (SPX) rose 5.53%. The best performer of the major indexes was the NASDAQ 100 (NDX) which surged 11.77% whereas the Dow Jones Industrials (INDU) lagged by advancing 4.56% and the S&P Small Cap 600 barely registered a gain.
The message is clear – the stock market is in the middle of a secular bull market and in the spirit of the late Larry Wachtel, the Generals are leading the charge.
The INDU managed to make its own history, topping the 20,000 plateau. It first crossed the 10,000 level on March 29, 1999. That is pretty good having endured the tech/dotcom crash and a financial crisis in between. It is a testatment to the resilience of stocks over the long run.
Make no mistake about it, the markets are rising on increasingly positive economic data – both hard and soft variety. Hard is quantifiable data while soft is survey data. Consumer confidence, a soft data item is at its highest level since 2000 and has risen rapidly since the end of last year’s 3rd quarter. Furthermore, expectations for tax reform and infrastructure spending legislation are manifesting in positive investor confidence. Should those become a reality, the SPX will likely trade up to (and beyond?) my 2,600 end of year price target. While 2,600 is about 10% higher, don’t rule it out if all the stars and planets align economically and politically.
Stock markets do not trade in straight lines. As superb as the 1st quarter panned out, there was some backing and filling in March. The SPX rose to an all-time high on March 1 and then muddled about the rest of the month, closing off that March 1 high by about 1.4%. I expect more fiddling about until 1st quarter earnings are released later this month. In addition, I expect that the SPX and NDX will continue to lead the charge into battle.
Speaking of battles, that 2017 Men’s Basketball Final 4 was played this past weekend in Phoenix. This year marked my fifth trip to the Final 4: Philadelphia (1981), New Orleans (1982), Atlanta (2013), Houston (2016) and Phoenix this year. I am going to pass the next year in San Antonio as it conflicts with Passover and perhaps the year after. However, Atlanta here I come in 2020 (Cousin David, please reserve a room in your house). As is typical, the semifinal doubleheader turned out to be the better games than the final on Monday. There are some exceptions such as last year’s dramatic victory in Houston by Villanova and of course the NC State miracle in 1983. This year’s final, won by the North Carolina Tar Heels was, in my opinion ruined by the referees who made too many foul calls on top of some poor calls in general. With the Raiders coming to Las Vegas (I am already on the season ticket waiting list) we should be getting a Final 4 here in the future (2022?).
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long DIA, DDM, QLD, TQQQ, SSO and SPXL, — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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