Message from Jon
The market has continued to surprise with upside gains and limited downside retreats. We have seen the indicators rally from 0.08% to 0.48% over these past couple months and even showed relative strength in both Domestic Equities and Cash with a decline in International and Precious Metals.
Speculation is that the rally has been boosted by the increase availability of capital thanks to the tax reform.1 My opinion is that the verdict is still out on that one. Being a business owner, the change in taxes provides a boost in the short run but over the long haul, you still have to produce whatever you are in the business of producing and be profitable as a result.
President's latest round of interest seems to be discussions to move business reporting results from a quarterly to a semi-annual basis.2 I can see why the general public would deem this ludicrous but again, from a business stand point, the amount of information and preparation that goes into a reporting season is mind boggling in addition to the focus on the bottom line rather than on what truly makes a company valuable....innovation, productivity and profits! This does have merit but the real question is can he push through the muck and mire of Washington to accomplish anything on this front or does it get chucked onto the scrap heap labeled "beneficial ideas" and forgotten about in favor of the #ITSALLABOUTMENOW attitude and appetites?
Based upon a successful earnings season, our opinion at the moment is that the worry and woe of a recessionary correction & possible market crash has been once again delayed until well into 2019 but more like 2020-2021 time frame. This beckons investments to remain in play and shooting for growth of principal rather than conservative and defensive. Should anything in the data change our mind, we will certainly change our approach.
Till we speak again, enjoy your week!