2017 was a near perfect year for equity investors, with steady global growth, low inflation and very low interest rates. Job growth was strong, with 2.06 million new jobs created. The unemployment rate declined to 4.1%, the lowest since 2000, and wage growth increased by 2.5%. Core CPI was up 1.7%, below the Federal Reserve Open Market Committee’s (FOMC) 2% target.
So how strong was the domestic stock market last year? Including dividends, the S&P 500 return was 21.8%. Eight of the eleven primary sectors had double-digit positive returns, led by technology, up 39%. The two lagging sectors were energy and telecom, declining by a mere 1%. The S&P 500 Index had positive returns every month, made 62 all-time highs and did not have an intra-year decline greater than 3%. For context, the average intra-year decline since 1980 is 14%, and in the prior five years it was 11%, 12%, 7%, 6%, and 10%. It was a very good year.
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