How to tell where the market going
Investors should watch for the consumer confidence numbers which will be reported tomorrow. Consumer confidence drives 70% of the markets. This number should give investors an idea of where the market is going. There will also be reports on housing and manufacturing.
The Fed is losing influence
Normally the Federal Open Market Committee (FOMC), a Fed 2 day meeting this Wednesday, would be important for investors and the markets. This meeting had the power to move the markets. Now, it has become a back page story as the markets are finally able to focus on corporate profits instead of Fed policy.
Allowing portfolios to increase
Corporate earnings had a good show last week. We are 25% of the way through the earnings’ season and we are beating expectations by a rate of 68%. This is a little higher than the historical average of 66%. It will be interesting to see if these positive earnings will drive the markets and allow portfolios to increase or if the Fed will continue to affect the markets. We believe that the Fed is on the back burner which will allow the market to continue to rally.
Pushing markets higher
Over the past few years, whenever we have seen some market momentum, fear of the Fed comes and pushes markets lower, which is bad for portfolios. Hopefully, now with the Fed on the sidelines, the US markets will be able to focus on companies making products and profit. This could push markets higher and cause portfolios to increase.
Markets are steadily moving higher
There are still a lot of market headwinds but hopefully we will continue to see the trend of earnings beating expectations at a 68% beat rate. Last week the markets were up 0.6%. We know that is not huge news, but the market is steadily moving higher, which could cause portfolios to increase.
Investors should appreciate how earnings are now affecting the markets as we normally expect them to. The Fed’s impact on the markets has lessened and now companies can do what they need to do – make products and profit.
Let us know your questions and opinions.
Comments
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Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here
Trey Booth, CFA®, AIF®
Vice President
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.
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