The wait is over—later this afternoon we will release our Midyear Outlook 2016 publication. With the S&P 500 closing at its first all-time high in over a year yesterday, the timing couldn’t be better. Coming into 2016 we expected a volatile year; but we were looking for routine year-end results in stocks, bonds, and the economy, and we knew it would be anything but routine getting there.
Well, 2016 started off with the largest drop ever for the S&P 500 after 28 trading days, down 10.5%, only to reverse course and close higher for the first quarter—a feat not seen since the Great Depression. Oil crashed and was down 30% for the year at its lows in February, only to subsequently rebound and close the second quarter up 30% for 2016. The massive rebound includes an 85% bounce off of the February lows. Commodities in general have seen a huge bounce this year, after lagging for much of the past five years. Yields have surprised nearly everyone and continue to sink lower, pushing Treasuries, real estate investment trusts (REIT), telecom, and utilities all much higher. And, who could forget the S&P 500 opening 3% lower than its prior close on June 24? That was thanks to the United Kingdom voting 52% to 48% to leave the European Union.
What do we see for the rest of 2016? We can’t give it away now—you’ll have to wait a few more hours. Some topics we tackle include: the path for future Federal Reserve (Fed) hike rates, potential international opportunities, second half growth prospects for the U.S. economy and corporate America, and a special focus on oil, the dollar, and earnings. Lastly, probably the most important question we’ve heard this year is: “What does the upcoming election mean for my investments?” We have done extensive research on this very subject and will share our insights for the upcoming election.
This has been a volatile year and we don’t expect that to change, but the good news is that the second longest bull market ever could still have some legs. With the LPL Research Midyear Outlook 2016, you will be armed with insight and guidance for what my lie ahead for the rest of 2016.
Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
The economic forecasts set forth in the presentation may not develop as predicted.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security.
Stock investing involves risk including loss of principal.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Because of their narrow focus, specialty sector investing, such as healthcare, financials, or energy, will be subject to greater volatility than investing more broadly across many sectors and companies.
Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.
This research material has been prepared by LPL Financial LLC.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit
Securities and Advisory services offered through LPL Financial LLC, a Registered Investment Advisor
Tracking #1-515451 (Exp. 07/17)