January 23, 2017

Markets are off to a much better start in early 2017 than in 2016. After 10 trading days, the S&P 500 was up 1.3% year to date, compared to an 8% decline during the same period in 2016. You may recall that a year ago, in early 2016, markets faced a number of significant challenges. Numerous market indicators were signaling a high probability of recession. The so-called earnings recession was at its nadir. Oil was plummeting, causing worries about the health of the banking system and the high-yield bond market. And the market and the Federal Reserve (Fed) had very different expectations for the path of monetary policy.

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