Monthly Archives: October 2013

Market Commentary: Third Quarter Earnings Season is in Full Swing 10/25/13

As many major corporations reported operating results. We have long held the view that earnings matter. Historically, there is a .71 positive correlation between stock prices and earnings direction. This means when corporate earnings rise, 71% of the time stock prices have risen as well.  We hold the view that earnings growth rates will likely increase during 2014 as compared to growth during 2013. This is one of the positive drivers behind our positive view on the stock market.  Despite the strong gains in 2013, stable corporate earnings, low interest rates and low inflation are likely to continue in 2014.  Continue reading

S&P 500 Sets New Record 10/18/13

The S&P 500 closed at an all-time high as investors shifted their focus from the debt ceiling debate to earnings.  Google (GOOG), General Electric (GE),  and Morgan Stanley (MS) all reported earnings this week that exceeded expectations and the latest economic data from China showed GDP grew better than anticipated at a 7.8% annualized rate in the 3rd quarter. Continue reading

Market Commentary 10/11/13

Cardinals Nation has been in a very good mood this week with the nice weather and the team moving on to the national league championship series.

Investors are obviously focused on the government shutdown and the political gamesmanship.  A recent poll indicated that the majority of voters would fire many politicians if given a vote right now. The sensationalism that has become the main work product out of Washington is getting old and voters are finally expressing their frustration. Continue reading

Market update 10/4/13

We are working on our quarterly market review and outlook which should be sent out early next week.  The big story this week is obviously the Government shutdown.  Republicans are hard pressed to find any way to force changes to ObamaCare so they have to use the debt ceiling to try to force negotiations.  They are proposing delaying the individual mandate for one year (which President Obama has done by executive order for businesses and the Unions), eliminating the exception for Congress preventing them from having to use the same system and eliminating the medical device tax.  I do think many Democrats would agree with some of these but they are resisting this because they do not want the debt ceiling to be “held ransom” to the Obama Care debate. Continue reading