Earnings and Igniting Momentum

Last week, we got really good news on the jobs front. This week, we are focusing on corporate earnings. We are starting to kick off earning season which is exciting because of how strong they have already looked in the past few months. We are also looking for earnings to re-ignite the momentum that we have lost the last couple of weeks from being in a tight trading range.

Jobs and Oil Production

We had a very good jobs number on Friday. The headline number was positive at 220,000 jobs created. The most exciting number was found underneath the hood. The unemployment rate ticked up. Now, why is that good? That is an indicator that people are coming back to the labor force. When jobs are being created while the unemployment rate ticks up that shows confidence that people who were out of the jobs force are coming back. You typically see this type of activity before you see a nice run-up in jobs and the growth of GDP. You might remember us discussing gas being lower at the pumps and oil prices being down over 20% in our VLOG a couple weeks ago. Historically, when this happens, oil production comes down. Last week the U.S. added 12 rigs. We are not cutting production which shows oil companies have cut their costs.

Inflation

Janet Yellen will be making her semi-annual address to Congress on Wednesday and Thursday of this week. As opposed to many central banks around the world, our central bank has a dual mandate to manage inflation and employment. In discussing momentum, job creation has outpaced people wanting to come in. We have tightened the slack in the system in terms of ecometrics. Another point of discussion this week with Yellen speaking will probably be inflation metrics. Despite the fact that jobs are going up, inflation is not following like normal. She will likely say on Wednesday and Thursday that this is more of a transitory movement. Our thought is that because of new technology and an aging population, the modeling of the system may need an upgrade.

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

Trey Booth, CFA®, AIF®
Senior Vice President
Wealth Consultant
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.

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