We have a tremendous amount of economic data coming out this week. This includes manufacturing from ISM, non-manufacturing from ISM, housing starts in construction and the ADP employment report coming out on Wednesday. Also, the Labor Department reports employment numbers on Friday.
Identifying the Missing Piece
Last week was a very busy week of earnings. A staggering 76% of companies beat estimates. However, the market was flat to down last week. So, we feel like it could be the end of the runway in which earnings can drive the market. What is the next piece to drive the market higher from here? We think it could be tied to the economic data coming out. Another indicator could be what is playing out in Washington. Companies are doing great in making new products and consumers are buying these products as it has reflected in the GDP. The market didn’t extend on that information as much as it has in the past. This leaves us searching for the missing piece of what can really push us forward.
The GDP number for the second quarter revised came in at 2.6%. While this number is indeed healthy, it’s still ideal to be north of 3%. If you break the GDP number down you will see that corporate investment is very good, being up to 5.2%. This makes for the second strong quarter in a row. The consumer also had a great quarter after a previous slow one, being up 2.8%. In recap, businesses and consumers are doing their part or so it seems. It appears that the political environment may be one of the major missing pieces in holding us up.
Ashley Page, JD, MBA
Senior Vice President
Email Ashley Page here
Trey Booth, CFA®, AIF®
Senior Vice President
Email Trey Booth 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.