Concerns over a possible recession
Markets are moving towards an all time high which brings up the debate of whether we are in a bull market or are they about to trade back? Last week was positive overall with jobless claims at an all time low. There are some concerns about retail sales and industrial production being down. The last two times industrial production was down three months in a row we were in a recession.
Can we have a bull market in a recession?
Bad news can be good news, as one of the Fed governors this weekend mentioned that in light of the recent bad data they should push the lift back of interest rates to 2016. This will prove positive for the markets as a market can climb a wall of worry.
Earnings Season pushes a bull market
Adding to a possible bull market is the fact that 92% of S&P 500 companies have reported positive earnings. While expectations where down 3%, the reports are up 2%. While it doesn’t sound like much, it’s pretty remarkable considering the market headwinds of the rising dollar and declining oil prices. Companies are making money even though we are in this deflationary period or headed into a possible recession. Even in this climate, the market can climb a wall of worry.
Implications of the Pacific Rim Trade Agreement
The Pacific Rim Trade Agreement has moved from the back page to a front page story. This has become a potent possibility for multi-national growth. Congress is now fast tracking this trade agreement. This could be the most important vote they have this year. It impacts investors that have international positions in precision engineering, aircraft, and agriculture. This will also help jump start Japan’s economy and encourage a bull market globally.
Thank you for your comments and questions. Please keep them coming.
Greg Powell, CIMA
Email Greg Powell 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.
The economic forecasts set forth in the presentation may not develop as predicted.
Stock investing involves risk including potential loss of principal.