U.S. Equities Midyear Update 2016

Equities ended the first half of the year wildly positive and remarkably resilient, with the S&P 500 having endured an approximate 10 percent decline in January and February to end the first half up 2.7 percent. The S&P 500 Index then reached a new all-time high on July 11. To a large degree, equities have begun the second half of the year priced to perfection. While the near-term risk profile of equities is elevated, the fundamental and macro backdrops appear supportive of equity prices. The outlook for equities is to grind modestly higher toward year-end, with volatility remaining high and returns below historical levels.