Our focus today is on all the mixed messages about the market and what could make portfolios go up. We still believe we are in a bear market. There are some big things going on in the markets. There are also many little things that could amount to bigger things and impact the markets and your investments.
Possible volatile market week
We are in earnings season and earnings are the mother’s milk of the markets. There are some big tech companies reporting their earnings this week. Last week, however, we saw some tech companies with disappointing reports. On Friday oil companies are reporting so we will see the amount of impact lower oil prices had on them. On Thursday we will see the GDP number which is expected to come in less than 1%. Remember, a healthy growing economy has a GDP at 3%.
On Friday we will see the personal income report which has started to become very positive. For the past few years the jobs reports have been growing steadily but income has stayed flat. We need this pick up in income to help with the economy.
How the news media can affect your investments
The Fed is meeting this week on Tuesday and Thursday and they will be looking at the GDP and earnings numbers. We don’t expect the Fed to do anything with interest rates but we are looking at what they say. It is all about the verbiage they use and how the news media translates and promotes it. Investors can expect to hear the news media juice up the Fed meeting before it happens just to get people to watch. Even though most people don’t expect anything to happen, this news media spin can directly affect investors’ portfolios.
What will make portfolios go up?
These past few months have been filled with contradictions. We came into earnings seasons with low expectations. While many companies have been beating these low expectations, the tech companies, which have been holding up the economy, are underperforming. With all these market contradictions, investors are asking, “What will make portfolios go up?” Hopefully, if the Fed is quiet, we will see more positive earnings reports which make portfolios go up. It’s still early in the earnings season so time will tell.
Staying conservative and cautious
Our technical indicators are telling us to stay conservative and cautious in our portfolios. There are still plenty of issues out there that could cause a big fire pretty quick. Investors need to look at the stock market in reference not only to the price of stocks but also the price over earnings (P/E ratio). We have continued to see the earnings numbers fall which is very concerning to us.
Politics are making people uncertain
Over the last eight years the current administration, along with new regulations, have made it hard to communicate about the economy to businesses. People don’t like uncertainty. The current populous political campaigns are more of an “outsider-in” campaign. There is a lot of political uncertainty and mixed messages right now. The economy and businesses do not like this as it affects taxes, trade, consumer confidence, and immigration. When people are uncertain, especially politically, they lock up. Companies don’t invest and people don’t spend. People are just trying to figure out what t he rules are not only in the economy but also in this changing political environment .
These are issues and topics we are focused on as we help our clients navigate the markets. Please send us your questions and feedback.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here
Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here
Bobby Norman, CFP®
Vice President
Wealth Consultant
Email Bobby Norman here
Trey Booth, CFA®
Vice President
Wealth Consultant
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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