FDP Market Quarterly Market Summary and Outlook

December 11, 2016

The third quarter began on a very uneven footing. The U.K. had
just surprised investors by voting to leave the European Union
(E.U.), and markets were in the process of digesting an enormous
amount of uncertainty and repricing shares in the face of that
uncertainty. However, hindsight has a way of offering clarity
that’s dicult to grasp in the middle of the storm. While markets
at home take their longer-term marching orders from profits and
profit expectations, in the short-term any number of variables
such as the surprise vote in the U.K. can influence sentiment. In
reality, Brexit led to a two-day selloff in shares (St. Louis Fed
Reserve). When cooler heads prevailed, the selloff was quickly
followed by new highs for the S&P 500 Index (see Figure 1) and
the Dow. In fact, the S&P 500, Dow Industrials and Nasdaq
Composite all reached new all-time highs in August on the same
day, the first such occurrence since December 31, 1999… READ ON

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