Tuesday, January 23, 2018

Tuesday Thoughts

A few of my thoughts as the work day progressed. Hopefully this will, at the very least, make you google something. 

For the last year it has seemed like the equities market is over-bought, too high, due for a correction, blah blah blah. It has been on my radar, seemingly with many other people as well. As we sprint into 2018 with a vengeance the market seems higher than ever and due for a setback. But are we?
Even though the major markets RSI’s are above 80 and there seemingly hasn’t been a down day since the start, 2018 is a year poised for continued growth.

Yesterday, the International Monetary Fund [IMF] updated the US’s projected economic growth up to 3%. In large part to the Trump tax cut, stocks have been booming and are projected to continue their run for much of 2018. Though he takes credit for the 2017 stock boom, many people believe the stock market increase is based on a foundation set by Obama. This year will be a different story.
Earnings reports have been off to a lava hot start. Just today, tariffs were imposed to further expand the ‘America First’ ideal, ultimately helping US Solar and other appliance/manufacturing sectors. Netflix was already at or near record highs and their fourth quarter earnings report shot them through the roof. I had my reservations about what the fourth quarter would bring for many companies, but so far so good. Now, I’m not sure if they posted great Q4 numbers or if their 2018 guidance was just fantastic, but that’s because I have done no research. What do you expect from a blog titled Uninformed Investor.

The yield curve is often used as a leading indicator to where the market is heading. It began flattening at the end of 2017 which some hairs and worried folks about the state of the market. October and November has since passed and the yield curve has creeped steadily upward. One report I read founded that in years the yield curve is sloped upward, the S&P 500 returns an average of just over 11%.


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