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Sentiment can drive shares higher or lower over a shorter period. Long term, earnings and earnings forecasts are the biggest factors that drives stocks.
As of January 15, S&P 500 profits are forecast to rise 14.0% vs a year ago, the slowest pace since Q3 2017 (Refinitiv). This compares with an October 1st forecast of 20.1%.
Analysts have pared back forecasts amid—
Slowing global growth
Trade tensions with China
Falling oil prices (reduces profits in the energy sector)
Downgraded outlooks from individual firms
The reduction in Q4 projections has contributed to recent volatility in stocks.
Each week, my goal is to educate, inform, and keep you apprised. More often than not, I find myself juggling various ideas that are relevant, timely, and, I believe, ones you’ll find interesting.
Santa’s Late Christmas Gift – A Blowout December Jobs Report
The US BLS reported that nonfarm payrolls jumped 312,000 in December, the best reading since February.
October and November were revised up by 58,000.
Probably not. Nonfarm payrolls have exceeded 300,000 five times since 2015, including the latest.
The Year Volatility Returned
The lack of volatility in 2017 was nearly unprecedented. We witnessed 310 trading days without two consecutive daily pullbacks in the S&P 500 Index3 of at least 0.5%, according to research firm Bespoke Group.
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