What is making stocks grow?
In our portfolio strategies meeting this morning we looked at some positive data that potentially could impact investors’ portfolios. This week we are seeing corporate earnings and corporate profits rebounding for the first time in the last five quarters. (See chart by Strategis Partners: 12/02/16) We need to see this momentum keep going as profits and earnings make stocks grow.
More people are working and making more money
The US economy created 178,000 jobs in November, driving the unemployment rate down to 4.6%. Even though we’ve had a down tick on wages last month, year over year, we are up about 2.5%. The consumer confidence we are seeing right now could be because people are spending more money during the holidays. This could potentially make corporate stocks grow by the end of the fourth quarter as it will be good for their earnings.
International surprises
The theme of surprising populace movements from the Brexit and the US presidential election, is now continuing in Italy. There, the Prime Minister announced his resignation when he lost a referendum vote to change their constitution. Pollers discovered the reason Italians voted this way was because they saw no real downturn when Donald Trump won the presidential election nor with the Brexit vote in the UK.
Surprisingly, OPEC decided to go ahead and cut oil production by 1.2 million barrels. While OPEC has been known to cheat and use the black market as a way to get out the oil they have already produced, this decision has allowed oil prices to jump 10%. This is great for US oil producers but consumers may see a spike in gas prices over the next few weeks. The final OPEC meeting is December 9th so it’s not a completely done deal. Historically, we’ve seen deals like these fall apart.
Next week on our vlog
Next week on our vlog we will be discussing the December 9th OPEC meeting and also the Fed’s meeting about raising interest rates on December 14th. We’ve been discussing for a while the possibilities of the Fed raising interest rates. It is now time to see what they actually will do.
So, who knows? With all this positive news, we could see a Santa Clause rally by the end of the year. We will keep you updated.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
Email Greg Powell here
Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
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Bobby Norman, CFP®, AIF®
Senior Vice President
Wealth Consultant
Email Bobby Norman 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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