If anyone is tracking the markets, they can see some pullback because everyone is focusing on the “now.” If you were to look at it from a larger scope there is a lot of great news coming out of our economy right now. The NFIB small business optimism index in May hit its highest level since 1983 and its second highest on record. Bonuses, as a percent of total compensation for all civilian workers, hit a record high of 2.4%. This is important to note because companies tend to pay these bonuses when they are doing well. According to Strategas, companies have repatriated $296 billion dollars so far through the first quarter. While this seems like a large number, it only accounts for 17.6% of the overseas cash.
Mergers and Elections
We are seeing mergers start to happen which results in cash coming back and going into bonuses and buying back stocks which, in turn, lifts stock prices. Currently, there are more job openings than available workers. This will more than likely lead to wages rising. Despite the barrage of negative news, 38% of Americans, according to Strategas, say they are satisfied with the way things are going in the country. While this sounds low, this is the highest level since 2005. There is a lot of focus on the mid-term elections. It turns out, on average, only 38% of registered voters vote in mid-term elections compared to 57% when a president is on the ballot, says Strategas. When you pull back the curtain and look from a wide view, there is a lot of extremely positive news.
It has been a political pull on all sides. The U.S. is protecting industries such as steel and aluminum. China is seeking out U.S. agriculture. A place where you could see an impact, possibly later in the summer, is from the consumer goods side. There could be some price increases. However, we could possibly see a wash if steel prices go up and soybean prices go down.
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.
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