November 8, 2016

Stocks Are Down but Long-Term View Is Up

We’re in the middle of an interesting moment for the markets, where short-term volatility and uncertainty might lead you to believe that the economy is faltering. After all, the major stock indexes lost ground this week, with the S&P 500 losing 1.94%, the Dow dropping 1.50%, the NASDAQ dipping 2.77%, and the MSCI EAFE declining 1.59%. On top of these losses, the S&P 500 posted its longest losing streak since 1980. Stocks are down but long-term view is up. Of course, we never like to see the markets go down. However, we believe that when you look beneath the surface, the economy is still doing far better than what this week’s performance implies. Behind the losses and ongoing election exhaustion, we see a number of strong indicators that the economy is growing. This week, we learned that the trade deficit shrank, the service sector grew for the 81st consecutive month, and manufacturing continued its steady growth. On Friday, November 4, we also got to see new data on jobs and payrolls – the last significant economic report before Election Day. What did the jobs report show us? Unemployment Rate Dropped                       […]
August 17, 2016

S&P 500, Dow, and NASDAQ Post New Records

S&P 500, Dow, and NASDAQ Post New Records WEEKLY UPDATE – August 15, 2016 Stocks ended last week mostly flat, falling slightly on Friday after the major U.S. indexes set new record highs on Thursday on positive earnings surprises. The NASDAQ also notched a seventh week of gains, its longest winning streak since 2012.[1] For the week, the S&P 500 gained 0.05%, the Dow grew 0.18%, the NASDAQ added 0.23%, and the MSCI EAFE grew 2.73%.[2] Earnings season is mostly behind us, and, with nearly all of the S&P 500 companies having reported in, we have a good overall picture of last quarter’s performance. Total earnings for the index so far were down 3.7% on -0.7% lower revenues relative to Q2 2015. However, 71.1% have managed to beat profit expectations, which has given stocks a boost in recent weeks.[3] Here’s what we can take away from the second quarter. Though earnings growth is still negative, it’s a vast improvement over what we saw in the first quarter from the same group of companies. Results are also better than the 4-quarter moving average. Revenue growth is also negative, showing that many companies are still (seven-plus years into the economic recovery) struggling […]