Positives
We are coming off the worst market performance for the week of Thanksgiving since 2011, however, there’s still a lot to be thankful for such as the consumer. Consumers make up 70% of our economy. Black Friday sales could end up totaling over $23 billion in sales which is a 9% increase from last year, showing that the consumer is strong. There are two things that could possibly bring this market back up. One, the Fed minutes will be released Thursday of this week. If the Fed minutes say that there will be a slower rate hike next year that could potentially make the market go back up. The second thing is on Friday of this week the G20 Summit starts and Trump will meet with the president of China. If President Trump can work out a trade deal with the China then that could make the market go up as well.
Negatives
The only negative that we can find is that this market has been focusing on the Fed and trading, everything else has proved to be positive. The third quarter earnings were up over 28.6%, which was higher than expected, and the year is projected to be up over 20% which is double what was assumed coming into the year. The stocks are making a lot of money, interest rates are still down, gas prices are still low and everything overall appears to be positive. So, it seems as though the market has only been focusing on the few negatives. People are anticipating the Fed making an incorrect move, but, it has yet to happen. There are comments out there about a recession, but we are not seeing the normal signs, such as increased unemployment or an inverted yield curve that would suggest a recession. GDP numbers are expected to show a 3.5% growth and historically anything above 3% suggests a good, growing economy. Also, 5 out of the 10 leading economic indicators are still going strong. Yes, there are certain areas that are slowing down such as the housing market but overall, we are seeing a lot of strengths in this economy and no reason to think negatively about it.
Retail Spending
One of the positives we have noticed is that lower income Americas are participating in the Black Friday and retail sales events going on currently. This is the first time in a decade that this group of individuals have so highly participated in holiday spending events. One reason is that gas prices are down. Another reason is because they work for companies on an hourly wage and recently those companies have been paying more than they have in the past, so, those consumers are now able to get out and participate in the shopping more than previous years. Without a good economy this would not be happening. We saw two large retailers close earlier this year which has had a big impact on other retailers. Over 11,000 retail stores have closed in the last two years alone. This has lead way to other stores, such as drug stores and book stores, starting to pick up the slack from the two that have closed. They are now selling products that they usually would have, in other words, no business selling. We have noticed toys and appliances, for example, explode across the market. We are curious to see if those stores end up with too much product at the end of the year.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
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
Adam Vansant
Associate Vice President
Wealth Consultant
Email Adam Vansant 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.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.
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