Investment Commentary –July 18th, 2017

Market Indices as of Market Close July, 18th, 2017
Dow 21,576 (9.17% YTD)
S&P 2,460 (9.91% YTD)
NASDAQ 6,344 (17.86% YTD)
Gold $1,241 (7.04%)
OIL $46.44 (-18.37%)
US 10Y Treasury 2.261 (-18.43%)
Barclay Bond Aggregate (2.46% YTD)

The U.S. stock market is the world’s most expensive

There’s nothing new about U.S. stock market investors fretting about valuations on Wall Street, but they still may not fully realize how pricey things have gotten relative to the rest of the globe.

According to StarCapital Research, the U.S. has the least affordable equity market in the world, coming in last among the 40 countries and regions it analyzed on a variety of metrics. While the U.S. doesn’t place last on any specific measure, it is among the weakest on all of them, resulting in an average that pushes it down to the bottom of the heap.

The U.S. is the second-most expensive country in the world when looking at the price-to-book ratio, a measure where it rates a reading of 3.1. Indonesia is the only country to top the U.S., with its 3.3 ratio. Developed markets as an overall category have a price-to-book measure of 2.1.

Headlines around the Web:

Canada tightens

Canada’s central bank on Wednesday raised interest rates for the first time in seven years, becoming the latest developed market to begin shifting away from accommodative monetary policies.

Dividend checkup

Dividend payments by companies in the S&P 500 rose in the second quarter, but at a slower pace than they did a year earlier. Factoring in dividend cuts as well as increases, payments climbed $6.7 billion in the second quarter to a record $104 billion, versus an increase of $7.3 billion in the same period during 2016, according to S&P Dow Jones Indices.

Retail squeeze

Stocks of major U.S. retailers have been under pressure this year, and the government’s latest monthly report on retail sales only added to the pain. Sales slipped 0.2% in June, marking the second monthly decline in a row.

Inflation comeback?

Although recent inflation readings have been unexpectedly low, U.S. Federal Reserve Chair Janet Yellen told Congress that she expects inflationary forces will pick up again in the coming months. The outcome could influence whether the Fed lifts interest rates for a third time this year.

On Tap for the rest of the week:

Wednesday: Housing starts, U.S. Census Bureau
Thursday: The Conference Board Leading Economic Index for the U.S.


This past week’s leaders included Technology, Services and Consumer goods. Laggards included Industrial goods and Financials.


On this day in 1996 car seat manufacturer Johnson Control Inc. made a bid to become the leader in luxurious car interiors by bidding $1.35 billion to acquire Prince Holding Corporation. Prince Holding Corporation was known for their “surprise and delight” attitude when it came to car luxuries. In a statement shortly after the merger it was estimated that the two companies combined muscle would raise Johnson’s annual sales from $850 million to $6 billion.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.