June 23, 2017
Equity indexes again this week lifted to new highs. Given the extended delay in many of the initiatives of President Trump’s pro-growth agenda, it is clear that most of the energy for the positive return for equities this year has been provided by expectations of an improved earnings outlook. The bond market has also provided very solid returns as yields have moved markedly lower at the long end of the curve. The ten-year Treasury yield has dropped 30 basis points since the beginning of the year. Recent economic indicators have been more supportive of the bond market as falling industrial production, weakening housing starts and anemic employment reports are further evidence of an economy that continues to plod along. Despite the equity market reaching new highs, increasing caution is being reflected in the positioning of equity investors. Defensive and value stocks have been receiving more interest over the last few weeks. It is perhaps too early to suggest that investor sentiment has hit an inflection point, but it bears watching.
Click below to listen to this week's Peapack-Gladstone Bank Market Report as heard on WCBS NewsRadio 880.