Last fall, the US Dollar rose after the election and many pundits worried about the effect of the rising dollar on corporate earnings from abroad. Treasury Secretary Mnuchin advocates a strong dollar over the long term which is a policy that has been in place for more than two decades. Here are his thoughts:
S&P on track to post best earnings since 2014
As we move past Election Day, financial markets should be able to refocus on what truly matters: company fundamentals. This should serve as a catalyst to push equity prices higher with earnings finally back on the rise. It has been a tough period for earnings because of the strength in the US Dollar and extreme volatility in crude oil prices. This trend appears to have finally stabilized. The energy sector is expected to post a flat quarter after posting huge losses for the previous four quarters.
Will S&P earnings drive the market to new heights?
Runnymede made one of the earliest calls on the corporate earnings recession in February of 2015. S&P earnings have been flat out terrible for 5 of the last 6 quarters with double-digit declines. However last quarter, the S&P showed signs of turning the corner. Analysts had forecast 10% growth heading into the first quarter but companies still fell well short of that mark for essentially a flat quarter. As 2nd quarter earnings season kicks off, analysts are even more bullish with S&P reported earnings growth forecast at 15%. While we do not expect this number to be that great, if it can even show high single digit growth, it could very well prove to be a catalyst for stocks to hit new highs.
The Market Is Broken: Thoughts on Big Investors and Lack of Oversight
In the financial markets, we have always had two important components: investors and regulators. Today, we are seeing governments as significant market participants that impact global markets. Sovereign wealth funds and public pension funds around the world are now among the largest owners of publicly traded stocks and bonds. China and Japan alone represent $5 trillion in public funds out of an estimated total $30 trillion of investments owned by 160 countries. No doubt these are investors of great size that can crowd out individual and institutional investors.
Asset Protection: The Fed, US Dollar and Economy… What, Me Worry?
The investment business can be funny. We all know that there are economic cycles and that the stock market goes through times of boom and bust. However, the conventional “”buy and hold”” approach says that you should not touch your portfolio regardless of what is going on in the world. You are encouraged to “”stay the course”” with no regard to asset protection.