General Commentary

On the whole, the most recent economic data portends a slight lessening of domestic growth. While employment trends are positive, the ISM manufacturing data suggests a marginally lower growth rate. Lower inflation readings also suggest less demand pressure on prices in the near term. This will no doubt be well received at the Federal Reserve, which is in the process of shedding hundreds of billions of assets on its outsized balance sheet.

GDP

GDP topped 3% in the last two quarters, for the first time since 2015. The post–Great Recession recovery has been characterized by relatively weak growth. The current forecast is for a 2.5% GDP growth rate in 2018, which is approximately the same overall level as 2017.

U.S. & World Equity Indexes; 12/29/17; YTD Return S&P 500; 2,688; 20.00% Dow Jones Industrials; 24,837; 25.70% NASDAQ Composite; 6,950; 29.10% Shanghai Composite (China); 3,296; 6.20% S&P BSE Sensex (India); 33,848; 27.10% Nikkei Stock Avg (Japan); 22,783; 19.20% CAC 40 (France); 5,339; 9.80% DAX (Germany); 12,979; 13.10% FTSE 100 (U.K.); 7,622; 6.70%
Selected Interest Rates; 12/29/17; 11/27/17 15-Year Mortgage; 3.44%; 3.31% 30-Year Mortgage; 3.99%; 3.95% 5-Year Treasury Bond; 2.20%; 2.11% 10-Year Treasury Bond; 2.40%; 2.36% 30-Year Treasury Bond; 2.74%; 2.76%
Key Economic Statistics; Most Recent; Prior Month National Producer Price Index; 0.40%; 0.40% Consumer Price Index; 0.40%; 0.10% Unemployment Rate; 4.10%; 4.10% ISM Manufacturing Index; 58.70; 58.70 ISM Services Index; 57.40; 60.10 Change in Non-Farm Payroll Emp.; 228,000; 261,000 New York State Consumer Price Index - NY, NJ, CT; -0.10%; -0.20% Unemployment Rate; 4.70%; 4.80% NYS Index of Coincident Indicators; 0.80%; 0.60%

Industrial Production

Industrial production continued its upward trend, posting a 0.2% increase in November 2017. This positive trend is expected to continue into 2018, albeit at a slightly slower pace.

Forté Capital's Proprietary; Bullish; Neutral; Bearish Market Risk Barometer; 10; 9; 8; 7; 6; 5; 4; 3; 2; 1 Market Valuation; 4 Monetary Environment; 3 Investor Psychology; 4 Internal Market Technicals; 5 As of 12/27/17 Overall Short-Term Outlook; 4.69 Overall Long-Term Outlook; 3.59
Equity Market Statistics; Most Recent; Prior Month Dow Jones Industrials Dividend Yield; 2.17%; 2.28% Price/Earnings (12 Mth Trailing); 21.54; 20.78 Price/Earnings (Projected); 19.50; 19.03 S&P 500 Index; 12/29/17; 11/27/17 Dividend Yield; 1.89%; 1.95% Price/Earnings (12 Mth Trailing); 23.30; 23.30 Price/Earnings (Projected); 18.85; 18.34

The information herein was obtained from various sources believed to be accurate; however, Forté Capital does not guarantee its accuracy or completeness. This report was prepared for general information purposes only. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities, options, or futures contracts. Forté Capital’s Proprietary Market Risk Barometer is a summary of 30 indicators and is copyrighted by Forté Capital LLC. For further information, visit www.fortecaptial.com, send a message to [email protected], or call 866-586-8100 and ask for David W. Henion, CPA, or Larry H. Rabinowitz, CPA/PFS.