The markets are giving investors a rational reason to remain optimistic, but with investors' focus on the Fed's statement yesterday (and their interpretation of what they think it meant) seems to be clouding their vision. The chart below shows the S&P 500's earnings per share (green line), which is what ultimately moves the stock market (blue line)higher or lower. Looking over the last three years, we've seen consistent, stable earnings growth. In early 2018, we can see the dramati… View More
As was widely expected, the Fed raised the Federal Funds Rate 0.25%, bringing it to 2.5%. The press release shows a balance of demonstrating a willingness to ease the previously outlined path of interest rate hikes and a desire to avoid giving the unintended impression that they view the economy as weak. Rather than stating today that there will be no rate hikes next year, their outlook changed from an expectation of 3 rate hikes to 2 potential rate hikes next year. In their statement, they s… View More
There were very few places to hide by the end of last week, as even the “safe” stocks and groups got hit on Friday with Consumer Staples down nearly -2%, Utilities weaker on the day, Software under pressure, and even the Healthcare sector clipped -3.3% by day’s end. Flows into Healthcare have turned particularly frothy over the last several months. Former leaders like Equipment and Managed Care are unlikely to be spared. That’s the thing about corrective phases – ultimately, even t… View More
Over the last few weeks we have gotten a lot of questions as to what is up with the markets. We have explained in great detail a few things that are weighing down the market, like the recent oil sell off, the Federal reserve tightening too quickly, and the trade negotiations with China. All of these things are affecting the market but they should not be making the market swing like it has since the election just a few weeks ago. We read a great article this morning that echo’s some of … View More
Turmoil reigned over the markets last week despite generally positive economic news. The last two weeks (months) have been wild, to say the least. For the week, a “risk off” sentiment prevailed; the Russell 2000® Index fell 5.56%; the Nasdaq lost 4.93%, S&P 500® Index fell 4.60% and the Dow Jones Industrial Average fell 4.50%. The week began positively, with the announcement that the U.S. would delay tariffs as it negotiated terms of a new trade pact with China. The euphoria quickl… View More