History of The McRib
We have plenty of charts to show today, but perhaps the most interesting chart of the day is about the McRib making a comeback. It has historically been added back to the menu around the fall season, so we wanted to have a little fun and show you a chart analyzing the performance of when the McRib is selling and when it’s not. According to the chart shown in this episode, the S&P 500 has performed much better when the McRib is in stock. No guarantees, but that sounds like a good technical indicator to keep up with.
Earnings Positivity
Last week we saw the S&P 500 have its best week since June. A big reason for that is corporate earnings and how they are surprising to the upside so far. As you can see in an earnings scorecard chart shown in this episode, 99 out of the 500 companies of the S&P have reported so far. We are seeing an unexpected report in sales growth and earnings growth, which was a driving force behind last week’s positive market performance. We are watching carefully to see if this trend continues, as this week is the busiest of the third quarter earnings season with over 165 of the S&P 500 companies reporting.
Technical Analysis
In last week’s vlog, we mentioned that we are observing to see if the S&P can get to a price of 3,800 and break through to the upside. We always like to give our viewers something to watch during the week, and the goal to get the S&P 500 to a price of 3,800 is an important number to look at because that was the early October high. That’s kind of what we consider resistance and would be a positive near-term development especially as big-term seasonality gets more favorable for the market. So, we will be watching carefully this week to see if we can break through it.
Returns
Treasury yields and bonds have gone up a lot this year and have started to show some returns. It’s interesting to look back in history and see what the market looked like the last time yields were this high, which is about 4.5% on a two-year term. As you can see in the chart shown in this episode, it was a completely different market. It was about 15 years ago with three energy companies in the top ten of the world. IBM was bigger than Apple at that time and GE was still up there. It is a much different market now. Over time things change and it’s interesting to look back. During Covid, rates were being cut and we had a lot of negative-yielding debt in the world. There was $18.5 trillion worth of negative-yielding debt. As of today, we’re at $1.5 trillion of negative-yielding debt. Even though it went down $17 trillion, $1.5 trillion still seems like a lot. There are only 51 securities left that are still yielding negative debt, and they all belong in Japan. The Bank of Japan has been one of the few to hold out on raising rates this year. Comparing this to when we had over 4,200 securities yielding negative debt during the pandemic to now where we are down to 51 new ones, is pretty remarkable.
Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here
Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here
Ty Miller
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.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.
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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