June 22nd Weekly Market Update
This week’s commentary features content from LPL Research’s Midyear Outlook 2015: Some Assembly Required.
Expect the bull market to continue through 2015. In the stock market, 2015 has felt like déjà vu. In 2014, the year began with a tough first quarter and finished strong. After a weak start to the year, we believe that corporate America will provide a much needed boost for the second half and 2015 may also finish strong — providing the seventh year of positive returns, in the 5 – 9% range we forecast.
STOCKS ON TRACK TO PRODUCE DESIRABLE YEAR-END RETURN
We remain confident in our 5 – 9% total return forecast for the S&P 500 for 2015, although reaching that target will require a power boost from corporate America. Our forecast is in-line with the long-term average range of a 7 – 9% annual gain for stocks, based on the S&P 500 Index, since WWII. Our forecast I based on expected mid-single-digit earnings per share (EPS) growth for S&P 500 companies, supported by improved global economic growth, stable profit margins, and share buybacks in 2015, with limited help from valuation expansion.
The S&P 500 Index is on track to meet that forecast by year-end, having returned 3.5% year to date through the end of May 2015 (and 3.5% year to date through June 19, 2015). However, headwinds that emerged early in 2015 mean getting there will require fresh batteries to fuel a second half charge.
For the full article: BATTERIES NOT INCLUDED: MIDYEAR STOCK MARKET OUTLOOK