The equity markets recovery continued last week led by a 2.96% gain in the Dow Jones Industrial Average followed by the S&P 500® Index (2.87%), Nasdaq (2.66%) and Russell 2000® Index (2.43%). Corporate earnings season began last week with major financial institutions including Citigroup, JPMorgan, Bank of America, and Goldman Sachs; each posted earnings that exceeded analysts’ expectations despite low trading revenues related to December’s severe volatility. The companies believe that economic conditions remain favorable with no signs of imminent recession. Schlumberger, one of the largest energy services companies, reported revenues which exceeded expectations and; more importantly, the company stated that it expects a gradual recovery in oil prices, and that spending on exploration and production (E&P) is beginning to normalize. The Transportation sector is considered a barometer of economic growth; here, companies surprised with better-than-expected revenue and earnings. Trucking companies JB Hunt, Knight Transportation, and railroad company Kansas City Southern, commented on positive outlooks for both shipping volumes and pricing.
Trade negotiations between the U.S. and China will resume on January 30th; last week, though, the markets reacted positively to unconfirmed reports of potential offers during the latest round of negotiations. The recovery in oil prices continues as the outlook for a trade agreement, and a more optimistic assessment of economic growth, would rebalance supply and demand. The British Parliament’s vote last week to reject the negotiated Brexit Plan creates uncertainty in the run-up to March 29, the date on which the United Kingdom (UK) is scheduled to leave the European Union (EU). The way forward is unclear: the UK parliament could vote to cancel its “leave” decision and remain an EU member; the UK could extend the deadline and/or issue another referendum; or the EU members could vote to delay to process. Some fear that another ballot might lead to a “hard Brexit,” a leave decision with no agreements with the EU.
The four-week rally in all of the major indices reflects a renewal of investor confidence. Those who abandoned the market during December’s severely oversold conditions are now reentering the market to avoid missing the recovery. Not surprisingly, the preliminary University of Michigan Consumer Sentiment fell 7% in December; the late month report reflected the market selloff, and volatility due to trade, monetary policy and energy concerns. Now, the 28-day government shutdown is creating problems for companies in need of government approvals for various initiatives. Over time, the disruption will likely weigh on market sentiment. The reports last week, while limited, indicate that investors overreacted in December. The selloff, though, may have motivated policymakers toward resolution to some of the markets’ underlying worries. Upcoming earnings reports should provide important insight into the health of the economy and influence market momentum.
Source: Pacific Global Investment Management Company
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Latest News
Last Weeks Headlines: 1/22/2019
1. Business activity grew slightly in New York State, according to firms responding to the January 2019 Empire State Manufacturing Survey. The headline general business conditions index fell eight points to 3.9, its lowest level in well over a year. New orders increased at a slower pace than in r...
Brian Amidei is Coachella Valley's only Barron's Magazine Top 1,000 Advisor in 2013 and 2014!
Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017 Five Star Wealth Managers!
Disclosures:
Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client?s experience or of the Firm?s future performance. Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:
Barron's Disclosure:
The Barron's award is is based on the recognized adviser's assets under management, contribution to the firm's revenues and profits, and quality of practice. Investment performance is not an explicit criteria. Additional information about this award is available at http://online.barrons.com/report/top-financial-advisors.
Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
Fortem Financial 2016. All rights reserved.
Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.
Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Forward looking statements are based on current expectations and assumptions, the economy, and future conditions. As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict. Actual results may differ materially from the anticipated outcomes. Carefully consider investment objectives, risk factors and charges and expenses before investing. Fortem Financial is a registered investment adviser with the SEC. Advisory services are offered through Fortem Financial.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.