We are in the middle of a great earnings season. So far, 80% of the companies that have reported earnings have beat expectations. Historical norms have been somewhere between 55% to 65%. Four out of six companies have outperformed on sales. This is a number we haven’t seen in years and is most likely economy driven. Despite all of these positive results, stocks have been relatively flat. This week is huge because 179 of the S&P 500 report earnings.
At the end of the week, the first quarter GDP will be reported. While this is an often revised number, we are watching this report closely. Right now the estimate is around 2%. GDP is basically a combination of all the sales and consumption in the United States. Currently, companies are reporting great sales numbers and we are expecting a mediocre GDP number, which is a head-scratcher. This could be a pleasant surprise if GDP comes in higher than expected.
The Fed team is starting to come together. Richard Clarida has been nominated as Fed vice chair. He teaches at Columbia University but has a lot of financial experience. He is highly regarded and people believe he will be a great fit with Jerome Powell. Also, Michelle Bowman was nominated as Fed governor. She is currently the Kansas bank commissioner. She is known for being business friendly and having a light touch in a regulatory manner. She would fill a spot reserved for the regulator of community banks which is important in lending to small businesses.
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.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.