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The Caldwell Trust Company Blog

Investor Sentiment - Equities Continue Their Recovery

Posted by Chris McGee, CFA CAIA

  • Equities continue their recovery

  • S&P 500 companies optimistic on 2018 earnings

  • 10-year Treasuray yield flat for the week

  • Bond market dominates capital market action

Domestic equities continued their recovery from the late January correction with the S&P 500, NASDAQ, and Dow turning positive for the week on Friday. The NASDAQ is up over 6% once again for the year; both the S&P 500 and the Dow are up 2%+.

90% of S&P 500 companies have reported and earnings are running abnormally higher than consensus estimates. More importantly, company guidance on earnings for 2018 is very optimistic. Per this week’s Barron’s (p. 15) – “between Dec. 31 and Feb. 15, 127 companies in the S$P 500 issued higher-than-expected guidance for 2018, according to FactSet. That compares with an average of 49 upbeat forecasts over the same period in the past 10 years.


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Topics: Market Preview

Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Domestic equities rebound

  • 10-year Treasury yield moves slightly higher

  • Markets adjusting to “perceived” inflationary pressures

  • Q4 earnings growth best since 2011
The domestic equity markets rebounded strongly this week closing in positive territory for the year. The NASDAQ continues to lead with a return around 5% year-to-date, both the Dow and the S&P 500 are up in the 2% range for the year. The dominant market theme for both equities and fixed income is whether inflation is reemerging after being dormant for years.
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Investor Sentiment 

Posted by Chris McGee, CFA CAIA


  • Now in correction territory for domestic stocks
  • 10-year Treasury yields rise once again
  • Bond markets driving equity market action
  • Market fundamentals solid, improving
  • Correction overdue and healthy

Technically both the S&P 500 and Dow have “corrected” as the indices are more than 10% off their late January highs. The three major domestic equity indices all declined more than 5% last week. The sell-off was prompted by investors’ reassessing inflation expectations and exacerbated by the trading of volatility (i.e. trading of the VIX).

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Market Preview Week of 2/5/18 - Investor Sentiment 

Posted by Chris McGee, CFA CAIA


Market Preview Week of 2/5/18

  • Equity markets decline by 4%
  • 10-year Treasury yield closes above 2.8%
  • FOMC Leaves rates unchanged
  • Q4 earnings growth continues to impress
  • We remain bullish on equities long-term

The broad domestic equity markets sold off on above normal volume last week after 10 months of consecutive gains. Indices declines from their respective peaks on average are around 4%. A lot of the decline occurred Friday after the release of the latest jobs report which showed a pick up in hourly earnings in the January numbers. Many interpreted the report as further confirmation that inflation is picking up. The reality is that wage growth increased or contracted depending on your measurement period. Actual monthly hourly wage gains have remained relatively muted and consistent since the election.

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