1Q earnings are in full swing and growth expectations heading into the reporting period increased from 12.2% on December 31st to 18.5% currently. Normally, expectations get whittled down during the quarter and then earnings post a modest surprise off depressed expectations. With the earnings preannouncement ratio exceptionally low, stocks may be priced for perfection. However, earnings growth is expected to accelerate even further in the coming quarters as companies report better top-line grow… View More
Markets rebounded this week as trade tensions eased. China’s President Xi Jinping’s speech this week at the Boao Forum reiterated past promises to increase imports, reduce import duties on automobiles, expand access to the country’s financial sector, and enforce intellectual property rights for foreign firms. Investors also responded positively to the prospect of a negotiated resolution to the tariff dispute; reports revealed that the U.S. and China had engaged in (unsuccessful) trade … View More
With all the talk about China, we wanted to share the attached article from Reuters. Since the first mention of tariffs, we've said that we DO NOT believe we will end up in a full blown trade war with China. It would not be in China's or our best interest. We've also cited multiple examples of both sides rolling their threats back after they were made. Below, we've included an article that again reiterates to us that much of what we're seeing may simply be posturing. Trump wants to appear st… View More
Markets declined last week as the trade dispute between the U.S. and China flared. On Monday, China provided a detailed list of tariffs on 128 U.S. products; the announcement was targeted retaliation for the 25% tariff on steel and 10% tariff on aluminum exports previously announced by President Trump. On Wednesday, the U.S. released a list of proposed tariffs on approximately $50 billion of Chinese imports, including medicine, aviation parts, and semiconductors. China responded with plans… View More
Looking at March, we observed 43% of its trading days experienced a spread of greater than 400 points between the day’s high and low. With spread between the market’s high and low at 743 points on March 1st and 737 points on March 27th, it’s apparent market volatility has returned. The VIX (volatility index) measured 19.97 (slightly ahead of its 20-year average of 19.4) on the last trading day of March. From reports published by the Investment Company Institute (ICI), we can see mon… View More