ILMA Compoundings May 2017 - 38

in the third quarter of last year, and
the expected rebound in forward
earnings estimates is impressive. This
bodes well for further stock market
gains as we move deeper into the year.
In the meantime, equities seem to
have moved into a holding pattern as
investors weigh heightened U.S. policy
risk against the improving profit and
global macro backdrop. The passing of a major corporate tax reform
package would buttress the revival in
animal spirits and likely boost stock
prices, but a retaliatory trade war has
the potential to do the opposite. For
now, and as our base case, it appears
corporate earnings growth will be solid
in 2017, on the back of which stocks
should produce healthy gains. Even as
we remain positive on global equities,
we recognize that it might be a rough

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ride from time to time, but barring the
unforeseen, those periods should be
used to add exposure.
More specifically, we find good opportunities in energy, financials, defense
companies and consumer-facing industries. Additionally, we favor small-company stocks, as they tend to be levered
toward domestic activity and stand to
receive a disproportionate benefit from
a lower corporate tax structure. European and Japanese equity markets hold
great appeal as well, for those seeking a
broader set of opportunities and global
diversification.
This report is provided for informational purposes only and shall in no
event be construed as an offer to sell
or a solicitation of an offer to buy any
securities. The information described
herein is taken from sources which we

believe to be reliable, but the accuracy
and completeness of such information
is not guaranteed by us. The opinions
expressed herein may be given only
such weight as opinions warrant. This
firm, its officers, directors, employees
or members of their families may have
positions in the securities mentioned
and may make purchases or sales of
such securities from time to time in the
open market or otherwise and may sell
to or buy from customers such securities
on a principal basis.

Carter is executive vice
president-wealth management
for CSG Capital Partners of
Janney Montgomery Scott LLC
and is investment adviser to ILMA.
He may be reached at 202-955-4307 or
mcarter@janney.com. Janney Montgomery
Scott LLC is ILMA's investment firm.

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ILMA Compoundings May 2017

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