With attention on the Federal Reserve's decision to increase rates and their updated outlook for 2019, we wanted to share an article today that CNBC published (included below). As we wrote in our commentary after the Fed's press release on Wednesday, we believe the Fed and Powell were (1) buying themselves time - and the ability to review the data that will come in that time, and (2) leaving the door wide open to reduce the number of rate hikes they may do in 2019 without closing the door on f… View More
The markets are giving investors a rational reason to remain optimistic, but with investors' focus on the Fed's statement yesterday (and their interpretation of what they think it meant) seems to be clouding their vision. The chart below shows the S&P 500's earnings per share (green line), which is what ultimately moves the stock market (blue line)higher or lower. Looking over the last three years, we've seen consistent, stable earnings growth. In early 2018, we can see the dramati… View More
As was widely expected, the Fed raised the Federal Funds Rate 0.25%, bringing it to 2.5%. The press release shows a balance of demonstrating a willingness to ease the previously outlined path of interest rate hikes and a desire to avoid giving the unintended impression that they view the economy as weak. Rather than stating today that there will be no rate hikes next year, their outlook changed from an expectation of 3 rate hikes to 2 potential rate hikes next year. In their statement, they s… View More
There were very few places to hide by the end of last week, as even the “safe” stocks and groups got hit on Friday with Consumer Staples down nearly -2%, Utilities weaker on the day, Software under pressure, and even the Healthcare sector clipped -3.3% by day’s end. Flows into Healthcare have turned particularly frothy over the last several months. Former leaders like Equipment and Managed Care are unlikely to be spared. That’s the thing about corrective phases – ultimately, even t… View More
Over the last few weeks we have gotten a lot of questions as to what is up with the markets. We have explained in great detail a few things that are weighing down the market, like the recent oil sell off, the Federal reserve tightening too quickly, and the trade negotiations with China. All of these things are affecting the market but they should not be making the market swing like it has since the election just a few weeks ago. We read a great article this morning that echo’s some of … View More