Summer is always a good time to pause and get a sense of where the market stands and where it’s going. Therefore, we’d like to provide you with a brief mid-year update. At a glance, our outlook for 2017 is positive. Drilling down by sector, it’s no surprise that technology has stolen the show. I recently spoke with Reuters on this, noting that despite some apprehension about stretched valuations, we expect the tech sector to provide double-digit growth in the second quarter.
While the tech industry’s growth excites us, we do not simply rely on one over-performing sector to bring success to a portfolio. It’s crucial to have diversity across various sectors, asset classes and geographies. International equities have performed well and global economic fundamentals continue to improve. Exposure to foreign markets will continue to support a diversified long-term strategy.
An area we continue to keep a cautious eye on is oil. Despite the rebound we saw in 2016, it continues to be a volatile sector in 2017. OPEC recently agreed to cut production causing prices to rebound. This rebound coupled with an abundant supply of oil gives us the confidence that prices will not return to the low levels we saw in 2014.
The first quarter came and went with a downward bias to U.S. GDP. However, we continue to see strong earnings and job reports, which is a comforting sign for the overall economy. Our economy is currently near full employment and growing steadily. Earnings are something we watch very closely each quarter and rely on in our investment decision-making process. Based on the past two quarters, we predict earnings to grow in the low double digits for the year and that’s great news.
In summary, anything can happen in the market but the progression in U.S. and international earnings, coupled with improving global economic fundamentals, leads us to believe that we’ll have a successful second half of the year. If you have any questions, don’t hesitate to contact your financial advisor.
This document contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements address our reasonable expected and anticipated outlook for various aspects of the economy and markets. Statements are subject to risk and uncertainties, which could cause actual results to differ materially from those anticipated. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results.
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