#189: Potential Market Movers – Earnings, Election, Economy

Potential market movers

Market moversThere are several potential market movers this week. There is a theme we are calling the 3 E’s, which are the earnings, the election, and the economy. Starting with the election, we believe the market has priced in a Clinton victory. Now attention is turning to the House of Representatives. Recent polls are predicting that the Republicans could lose 13 seats. The markets will be looking to see if we are going to have a swing election.

Will Gross Domestic Product pick up?

GDP numbers come out this Friday. GDP growth has been slow and just above 1% for the past couple quarters. We are looking for GDP to pick up.

What’s behind the slow GDP numbers?

Market moversThe slow growth of GDP has be going on for what seems like forever. Peeking behind the numbers you will see that much of this deals with the entrepreneurs in the United States. In the 80’s and 90’s about 12% of employment opportunities in the country were created by a start-up company. Now it is down to 2%. This represents hundreds of thousands of jobs. The quality is also taking a hit as many start-ups are dynamic, technology driven, and productive. This may be due to credit drying up and regulations. This takes a way the ability to move from a great idea to a growth phase of a company. People are saying that the growth process is not worth it.

Earnings projections for next year

Market moversThis will be a big week for earnings as nearly one-third of all S&P 500 companies will report. It’s important to not watch just what they report, but what they project. Projections for next year are really high. Corporations are expecting a big balance and growth which we haven’t seen in six quarters.

Iraq wants special treatment

Over the weekend Iraq has declared that they want to be excluded from the OPEC agreement to freeze production. They claim they need to produce oil because they are involved in a war. Ironically, there are many other middle eastern countries also involved in wars, yet Iraq wants special treatment.

Potential lower gas prices

Market moversOPEC is less than a month out from making this decision to freeze oil production and we are already seeing cracks form. We have seen oil drop back this morning and if that continues, we could be seeing lower prices at the pump. It will be interesting to see if OPEC sticks with this agreement in their November 30th meeting.

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Greg Powell, CIMA
President/CEO
Wealth Consultant
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Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
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Bobby Norman, CFP®, AIF®
Senior Vice President
Wealth Consultant
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Trey Booth, CFA®, AIF®
Vice President
Senior Vice President
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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.

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#190: The Election Spooked The Markets #188: The Election, Pensions, And Your Portfolio