The Northern Star 08/09/18 Stocks Up as Data Comes In
Message From JonMarket Update: This past earnings season, the market has really responded nicely. The majority of companies reporting this quarter significantly outperformed their earnings reports giving this market something to cheer and rally behind. We have gone from "the next recession is happening next year"(1) to "the next recession is nowhere in sight"(2) and it gives me a chuckle. According to Eric Kuby, CIO for North Star Investment Management , "analysts increased expectations ahead of earnings this year and even then, for the first two quarters, over 75% of those reporting gave expectation-beating numbers"(3). For future expectations we are also seeing an increase that could further delay recessionary fears and encourage GDP numbers and continued Fed interest rate increases. For those who are optimistic, do not let yourself get out over your skis and believe that the inevitable will not still come. For those who are pessimistic and unsure of the economy, it is looking a lot more durable and sustainable than once believed at this point. We still are cautiously optimistic and steady in our analysis and investment alignment efforts going into the fall where historically, we see some bad and good months for investing. All things being what they are at the moment our opinion remains, investment in the markets is still a sound option. Eventually, that will not be the tune and when the music dies, you do not want to be the last one standing so it is wise to use this time for preparations. Paying down debt, looking to possibly restructure any variable debt into a fixed position, evaluating what did well and what did not during the 2008-2010 market cycle and paring down your lifestyle are all good places to start. "If you want peace, you prepare for war" as the saying goes. I am not being pessimistic or a Debbie downer here. My experience over these past 18 years has been that when the market is good, people over-react and raise their lifestyle, upgrading their housing, phones, cars, equipment, and so on, and when the market is bad investors look bewildered and claim that they never saw it coming and regret their wouldda, couldda, shouldda feeling. For now, we have time on the clock and it's best to use it as wisely as you can while it's there to be used. Stormguard is registering 0.43% as of last night and is holding steady, but with this current earnings season and future earnings, it may rise more. Until we speak again, enjoy your back to school week! Jon
|