According to an index of CEO ‘s projections for the next six months, business sentiment in the United States appears to have taken the largest leap in about eight years. That, dear reader, is noteworthy.

So far, this year we’ve seen markets move upward, volatility act relatively friendly, and a long-ish stretch of time with limited drawdowns in US markets. The record surge in CEO confidence will most likely add to the optimism.

The Business Roundtable CEO Economic Outlook Index just had its highest jump of +19.1 points in Q1 of 2017. That takes it to 93.3 which is a lot higher than its historical average of 79.8. And it has turned in this number for the first time in seven quarters. Keep in mind that any reading above 50 indicates over-all expectation of economic expansion.

In addition, the employment sub-index increased 18 points to 73.6, (also the largest increase in seven years), the highest level since Q2 2014. In fact, 41% of the surveyed CEO’s reported expectations of an increase in hiring compared to last quarter’s 35%.

Is it possible that Trump’s proposals are behind the confidence? CEO’s believe the policies most crucial in generating a positive environment are reforms related to taxes and regulations. Perhaps Trump’s repeated pledges to slash tax rates and executive orders to loosen financial regulations could be responsible in part for the high expectations.

And then there’s the 35% top corporate tax rate in the USA – among the highest rates in the world. This has long been viewed as a disincentive leading to limited domestic employment and growth.  Ditto re the Trump comments.

Of course, the promises to repeal most of the Dodd-Frank regulations may expand opportunities for banks to invest and lend, potentially increasing fund-raising channels for businesses. These are all good predictors of future growth.

But what about Fundamentals?

Promises and proposals by themselves can’t guarantee business prospects. What’s more important (and often overshadowed by the noise of the press) are clear fundamentals which look strong for US businesses. Q4 2016 corporate earnings grew by 7.1% (over the prior year). This is the fastest pace in two years. Additionally, the total value of quarterly earnings hit a record high at $287.4 Billion. (Zacks research). Current projections for this year’s quarters point towards still higher earnings, especially toward the end of the year.

So, Ron, “What’s the Bottom Line on all this?”

Glad you asked: Seeing the corporate community’s record-high sentiment numbers, plus the promising economic fundamental numbers, markets appear to be continuing the current bull market. Despite the recent bouncing around of the major sectors that make up the US markets, the overall environment looks good to us.

Source – the numbers come from Zacks Newsletters from this week.

Market Minute 3/31/2017 – A One-Week Change- and question re Stopping your Social Security

The US markets have been on a bit of a pullback since about the beginning of March. It’s been minor thus far, and we’d have to expect a bit of either consolidation or pullback after the strong first part of this year. However, the pullback may be over for now. This week saw the ‘defensive’ parts of the main market index, the S&P 500*, Utilities, Consumer Staples, and Healthcare, all pull back. When the defensive parts of the market pullback and the more aggressive parts of the market like Technology and Industrials move up, it looks like we’re rotating back to an upward market. A week doesn’t make a trend of course, but that’s what we could be looking at. We like what we see.

Question – “Can I suspend my social security benefits and then resume later?”

This may seem like a strange question, but we’ve had several clients ask, so perhaps there are more of you out there with the same question.  Forbes’ answer:

Retirees can suspend and resume their social security retirement benefits any time after their full retirement age, even if they started collecting the benefit before reaching their FRA. They earn Delayed Retirement Credit for each month they suspend the benefit and don’t need to repay the benefits they have received since it is not the same as withdrawing the benefit.

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at info@denkinvest.com.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

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