U.S. Equities Update: Off to a Rough Start in 2016

U.S. equities are entering 2016 and approaching the seven-year bull market anniversary amidst market crosscurrents, however, macro and fundamental backdrops remain favorable for equities. Inflation, earnings, valuation, interest rates, and sentiment are all generally supportive of equity prices. Conversely, the continued drop in oil prices, slow pace of global growth, diverging monetary policies between the United States and central banks around the world, geopolitical instability, and negative implications that rising interest rates and firming wages may have on profit margins are among items indicating that the risk profile for equities is elevated.