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Stocks and a Government Shutdown - January 22, 2019

The partial government shutdown entered its 27th day last Friday. It is the longest on record. Essential services continue, there is a no interruption in Social Security checks, but people are affected. There’s been no shortage of stories of federal workers who are either furloughed without pay or are working without pay.

But, what about the historical impact of a shutdown on stocks. The table below highlights the impact.

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Scheduled Office Closure - January 18, 2019

Please be advised that we will be closed on Monday, January 21st, in observance of Martin Luther King Day. We will resume our normal hours of operation on Tuesday the 22nd. We hope all of our clients and their families have a safe and happy holiday weekend!

Q4 Earnings Season Gets Underway - January 16, 2019

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.

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Update on December Jobs Report - January 9, 2019

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.

Sustainable?

Probably not. Nonfarm payrolls have exceeded 300,000 five times since 2015, including the latest.

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