In the current stock market, irresistible forces for economic growth face seemingly insurmountable stock market barriers. GDP is finally spearheading economic growth. However, record operating margins stand a formidable shield against earnings growth.
Congress passed a new tax plan this week. Much anticipation and debate surround the effect of these tax cuts on the GDP, and by implication on the stock market. What realistic expectations can we have in the near term?
With third quarter reporting nearly concluded, S&P 500 companies are delivering growth rivaling post-recession 2010. Not surprisingly, valuations are also breaking records. Meanwhile, record margins present more challenging hurdles to 2018 growth.
In the short-run, the market is a voting machine. Some risks have abated as others become the focus of the market’s voting mechanism. If the market climbs a wall of worry, I would worry about the wall growing shorter.
Is October the worst month of the year for stocks, or has it taken the blame for September? Sensationalism is a mainstay of articles on seasonal or calendar investing. We’ll take an objective, Coherent approach to stock market seasonality.
On August 21, the Great American Solar Eclipse will trace a “path of totality” across the continental United States. Allegorically, expectations of accelerated earnings growth may become eclipsed by looming comparable earnings hurdles at already elevated stock market valuations.
Sector rotation has accelerated to a whipsawing pace. Mismanaging sector allocations can severely affect your portfolio’s risk-adjusted performance. Is it time for sector rotation strategies? If you like jumping from one moving roller coaster onto another, then yes.
June brings some extra dividends from funds which pay semi-annually. It’s also when investors have more difficulty understanding their account statements. A basic knowledge of dividends and how they’re reported can replace frustration with understanding.
Companies are finally turning performance from “worst-since” to “best-since” while wrestling rising hurdles in a radically changing environment. Expectations have risen to over 20% growth, much of which markets have priced-in at peril of a more serious correction.
Like Shakespeare’s plays, markets are human nature on display. Expectations become extended with rallies as the best outcomes are priced-in. But in protracted corrections, hope ebbs as the worst outcomes are discounted. Today’s market is where “oft expectations fail”.