Earnings Up, Growth Accelerating

Earnings & Confidence

One of the themes throughout the year so far has been the recession of confidence.  We are now starting to see that confidence come back.  While you may be seeing and hearing a lot of negative things in the news media today, there actually is a lot of positives occurring behind the scenes.

Since the beginning of the year we have been looking at how earnings can be a key component.  So far we are liking what we are seeing.  Earnings, so far, following the first quarter are tracking for a 14.7% increase year-over-year.  Since last year we have been saying that it’s important to have strong corporate earnings and for corporate guidance going forward to be positive. While there is so much uncertainty in D.C. with political risk, as long as we continue to have good earnings, we are on track for some great things.

Earnings reflect stock prices, that’s how it works. One of our concerns in 2016 was that corporate earnings weren’t going up.  With the tight trading range we have had the last couple of weeks with all the risk focused elsewhere, earnings are holding up.

GDP & Acceleration

The GDP (Gross Domestic Product) looks like it’s accelerating into the second quarter, which could be on track to have the best quarter since 2014.  The Federal Reserve Bank of Atlanta is forecasting about a 3.6% rise.  Since the economy is growing, earnings could have a better chance of rising with consumer spending. Three important things to look at when discussing consumer spending are wealth, income, and how much they are able to borrow.<

Part of the reason the first quarter was down was that borrowing was down, so once this improves a little bit that can help re-accelerate.  One of the areas where borrowing has been up is auto loans, but it is also starting to improve in other areas..

 

 

Greg Powell, CFA®, AIF® Senior Vice President Wealth Consultant Email Trey Booth here

Bobby Norman, CFP®, AIF® Senior Vice President Wealth Consultant Email Bobby Norman here

Ashley Page, JD, MBA Senior Vice President Wealth Consultant Email Ashley Page here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

 

#221 Bearish Politics Bullish Corporations #219 Economy Growing, Regulations Shrinking