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The Tell: By this measure, U.S. stock market returns aren’t as big as they look

Adjusted for a weaker U.S. dollar, S&P 500 gains in 2017 were less impressive than meets the eye, and offer yet another reminder why portfolios should diversified globally, according to analysts at New Frontier Advisors.

The S&P 500 SPX, -0.06% rose 19.4% last year, fueled by optimism over corporate tax cuts and favorable economic growth environment as well as low inflation. The stock market performance, attributed in part to a strengthening economy, stands in contrast to a flattening yield curve and a weakening U.S. dollar, both of which signal low economic growth in the long term.

The yield curve—the difference between short-dated and long-dated yields—has been flattening steadily since 2013, when it was at about 265 basis points.

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