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.
Investors saw the markets take a step back last week. The cause came from the low expectations on the earnings reports which we will start seeing later today. The good news is that if the earnings expectations bar has been set low, the markets might be able to jump over it and bring some momentum to the markets.
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.
A viewer sent us a question last week asking if a terrorist attack can cause a bear market. Going back to the 1970’s we can see that usually they do not. In the past, the markets have shrugged off a terrorist attack with September 11th being the exception. Five days after 9/11 the markets were down 12%. The only real concern we would have of a terrorist attack causing a bear market would be if the terrorist attacked our …
Investors felt an impact on their portfolios from a falling dollar as the Fed did not cut rates and lowered their rate hike expectation from four to two this year. That caused the falling dollar which increased oil prices.