Corporate America
There is currently a lot of bad news hitting the market right now. Today, we wanted to focus on the bright spots. There’s a lot going on, from higher interest rates due to an aggressive Fed, the Russia and Ukraine conflict escalated last week, and there’s been a lot of talk around a recession. It’s important to highlight that there are still a lot of positive things to talk about. One of those bright spots is corporate profit margins. In a chart shown in this episode, you will see that corporate America is still healthy. On the chart, you will see the current profit margins on a solid blue line and if you compare it to the dotted red line, which is the rolling ten-year average, you can see that profit margins are still attractive compared to historical standards. It’s something we’ll be watching closely to see if profit margins can hold up at these high levels.
Interest Rates
Last week, the Fed increased interest rates by 75 basis points, as expected. They’re still battling inflation but one strong point that we’ve seen is that the inflation that we see in our everyday lives is starting to come down. That has to do with food prices as well as gas prices. Gas prices went under $80 a barrel for the first time since March when Russia invaded Ukraine. We will continue to monitor consumer positivity in relation to these prices going down.
Technical Analysis
With the market trading back last week after the fed announcement, we’re watching the S&P 500 for a price level of 3,637. It’s essential that we hold this at this price because that was the low, we saw back in June. We would like to see the S&P 500 break above the price of 3,800. That would be a huge positive moving forward. We will be getting a lot of economic reports this week that could drive the market, including an update on housing and the consumer and an update at the end of the week on core inflation. That’s the number that Fed will be watching closely. There’s a lot of news this week to keep an eye on but let’s not forget that there are still a lot of bright spots in this overall market.
Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here
Ty Miller, AIF®
Associate Vice President
Email Ty Miller here
Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based 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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