Market Insight | Q3 2014 Review | “Stocks Post Another Winning Quarter”

A Look Forward

We expect U.S. economic growth to exit 2014 at a run rate of economic growth of 3%, supported by improving business spending, the elimination of the drag from fiscal policy, and improving global growth.

Our forecast for the stock market in 2014 remains for 10 – 15% returns, based on a continuation of the 5 – 10% earnings growth experienced during the first half of the year and still reasonable valuations, especially when considering low interest rates and low inflation.

Strong performance in 2014 has left the bond market richly valued in our view. We do not believe the yield compensates investors for the interest rate risk, and we expect stronger global growth and higher inflation to lift yields over the balance of the year, weighing on bond market returns.

Click here for the complete LPL Financial Market Insight.