The Weekly Update 4/7/2023
Better Than Expected!
In last week’s update (3/31/2023), pasted in below, I listed some facts that we should look at one more time, as they are positive.
Perhaps more importantly they suggest something we have seen during every market pullback I have experienced, including “the mother” on October 19, 1987.
The common denominator is that as nutty as the world is at any given time, we Americans might be happy or unhappy, but we tend to remain productive in whatever we are doing!
Hence, starting next week, the earnings numbers will be coming in “better than expected”.
You will hear that term many, many times in the next 90 days as Corporate America reports Earnings per Share (EPS) for Q12023.
Let’s say it out loud together… “BETTER THAN EXPECTED!”
And pasted in here from last week is the why!
The Weekly Update 3/31/2023
Today I returned from a long weekend to review "The News"! Of course, all of the same old "monsters" were there!
BUT I could not find any of the real-life facts like these below in the news. Hmm…
Markets stand at 14.6 times earnings (ex-FAANG), a great deal compared to bonds, even after the recent increase in interest rates.
The Fed is now closer to the end of the interest rate increase cycle, much closer.
The earnings for Corporate America, as measured by the S&P 500 remain up overall.
Manufacturing buildout exploding.
Over $110 Billion in new factories being built with no fanfare.
Supply-chain is not only being fixed and rebuilt but is almost back to pre-covid levels.
Inventories coming back to normal.
GDP up, productivity turning up again.
Cash flows for Corporate America are up, even after higher input costs.
Corporate stock buybacks and dividends are on track for the highest in history. 2023 estimate is for over $1 Trillion in buybacks.
In my opinion, it is 70%/30% and maybe 80%/20% that the worst of this nutty 15-month drawdown in valuations is close to over.
I’m interested in your thoughts, comments, and observations. Feel welcome to call, email or stop by the office and say Hi.
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.