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Jan 18, 2018

Market Highlights 4Q 2017

Christina Siegel Malbon

The S&P 500 Index finished the year up 21.82% followed by the Dow Jones Industrial Average returning 28.11% for the year with the Nasdaq Composite surpassing both, closing out the year with a rise of 29.73%. Nine out of the eleven sectors in the S&P 500 posted positive returns at year end, with Information Technology and Materials gaining the most with returns of 38.83% and 23.84%, respectively. On the other hand, Telecommunications did the worst posting returns of -1.25%.Large-caps outperformed mid-caps, which beat small-cap names. Specifically, the large-cap Russell 1000 Index returned 21.68%, ahead of the Russell MidCap Index’s 18.50% return for the year. The small-cap Russell 2000 Index posted 14.63% returns. Growth stocks outperformed value stocks with the Russell 1000 Growth rising 30.21% compared with the Russell 1000 Value Index’s increase of 13.64% over the year. Stocks outperformed bonds, with the Barclays U.S. Aggregate underperforming all equity benchmarks with a 3.54% return. Long dated US Treasuries performed better with the Barclays Long-Term Treasury Index rising 8.98%. Gold continued its rebound in 2017, increasing by 12.01%. The US Dollar Index declined 9.87%, while oil prices rose 12.47%. All major developed countries ended the year up in local currency terms, with Hong Kong being the top market with a total return of 41.27% in local currency terms. Emerging market countries also had a strong year with India and Brazil posting the largest gains in local currency terms, 30.27% and 26.86%, respectively.

The stock market continued to move higher in the fourth quarter with the Dow Jones Industrial Average leading the charge with a 10.96% quarterly gain while the S&P 500 gained 6.64% and the Nasdaq Composite rose 6.57%. In December, the Fed raised interest rates for the fifth time since the financial crisis. All eleven sectors in the S&P 500 posted positive returns for the quarter, with Consumer Discretionary and Information Technology gaining the most with 9.87% and 9.01% returns, respectively.

The views expressed in this commentary reflect those of Miller Value Partners analysts as of the date of the commentary. Any views are subject to change at any time based on market or other conditions, and Miller Value Partners disclaims any responsibility to update such views. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results.

©2018 Miller Value Partners