July 2018

Economic Comment and Market Outlook

While the S&P 500’s total return of 2.7% for the first six months of 2018 sounds fairly pedestrian, the first half of the year witnessed a sudden return of market volatility that had remained dormant throughout 2017. After a stellar January saw the market index rise to record highs, stocks retreated in February and March when the possibility of faster-than-expected inflation and higher interest rates triggered a spike in volatility. The S&P 500 experienced one of the quickest 10% declines from an all-time high on record, a move that was exacerbated by the unraveling of trading strategies betting on low equity volatility. The second quarter brought threats of tariffs, trade wars, and strained international relations; however, the S&P 500 generally rebounded through the end of June, supported by superb corporate profits and persistent economic growth. With profits and cash returns to shareholders continuing to increase smartly in this period of stagnant stock prices, the broad market and our investment portfolios enter the second half of the year with improved valuation metrics and a solid foundation for a further advance.

Click here to see the entire July 2018 Commentary

January 2018 Commentary

August 2017 Commentary

January 2017 Commentary

July 2016 Commentary

January 2016 Commentary

July 2015 Commentary

February 2015 Commentary

The above commentaries do not constitute an offer of any securities or investment advisory services. Fayez Sarofim & Co. does not represent that the information contained in the commentaries is accurate, true or complete, makes no warranty, express or implied, regarding the information herein and shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy, truth, completeness or use. Each commentary is subject to a more complete description and does not contain all of the information necessary to make an investment decision.

The volatility of any indices referenced in the commentaries may be materially different from that of Fayez Sarofim & Co.’s products. In addition, Fayez Sarofim & Co.’s holdings may differ significantly from the securities that comprise any highlighted indices.

Any projections, market outlooks or estimates expressed in the provided letters are forward looking statements and are based on certain assumptions. Such projections, outlooks and assumptions should not be construed to be indicative of the actual events that will occur and do not constitute investment advice. Opinions and information included in the commentaries were current opinions and information only as of the date thereof or as of the date indicated, and are subject to change without notice. Additionally, while information presented in the commentaries is believed to be accurate as of the date written and/or derived from sources which Fayez Sarofim & Co. believes to be reliable, Fayez Sarofim & Co. disclaims any and all liability as to the completeness or accuracy of the information contained therein.

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