The Brexit (the British exit from the European Union) impact has been felt more in our markets than the impact from the Fed. Even though the possibility of the Fed raising interest rates went down from 50% to 20%, the Brexit impact caused the market to trade down last week. More in the video.
We are seeing positive results from the low oil prices we have had for 18 months now. There has been a rise in consumer spending which is very encouraging economic news. There could be more positive news this week.
We currently have a conservative portfolio strategy because of the Fed’s very hawkish statement last week, low earnings, and a drop in market expectations. Now that bad earnings are in the rear view mirror, we are looking at a very unaccommodating Fed in front of us. There is a lot of information that is all over the board.
Currently here are many mixed messages in the markets. While many companies have been beating their low earnings expectations, the tech companies, which have been holding up the economy, are underperforming. With these contradictions, investors are asking, “What will make portfolios go up?” Our answer in the video.
We had a mixed bag of economic reports come out last week, some good some bad. The jobless claims report was good but the bad was in retail sales and small business sentiment, which hit a new year low. We believe a lot of business owners have fears concerning the upcoming elections. There is an uncertainty and the markets don’t like uncertainty.
Janet Yellen’s dovish statements last week canceled any notion that there would be a live Fed meeting in April where they would discuss raising interest rates. This limits the Fed from making market altering news until their June meeting, making oil and corporate earnings the top drivers of the markets.