Earnings, the key to Capital Market Growth … Let’s get an update?

The ultimate driver of Capital Markets are Earnings. Yes, we can argue about interest rates, currencies, world political and economic cycles, but all of these events are only important in how they change earnings or the growth there of “Earnings”.

Let’s take a look at early statistics from 2017!

Earnings Via our Friends at Factset

This from Factset, one of our favorite data aggregators in their regular weekly report.

  • Earnings Growth: For Q1 2017, the blended earnings growth rate for the S&P 500 is 13.6%. If 13.6% is the actual growth rate for the quarter, it will mark the highest (year-over-year) earnings growth for the index since Q3 2011 (16.7%).

Looking closely at the following chart, which is TRAILING earnings, forward looking capital market expectations can be seen. The trailing earnings are actually falling over the last few years, but the forward expectations as noted from the first bullet above are expected to climb more rapidly than the past six years.

5-12-17 Factset EPS change and Price

 

So just where are these revenues that are creating accelerating growth coming from?

5-12-17 Factset Geographic Rev chart

P/E or the Price to Earnings is the most blunt way to measure the valuation of capital markets. A high P/E might mean markets are overvalued and need to grow into their valuations, or a reversion to the mean reset to a lower level may be in the cards.

5-12-17 Factset 12 PE ratio V long term

From Factset’s estimates above, the current market P/E is about 22 with a normal of 16-17, undoubtedly higher than normal but certainly no guarantee of an imminent reversion down to lower levels.

If the growth estimates mentioned in the very first bullet come through in 2017, much of this froth may be taken out of the capital markets.

Either way, we have your back via our good friend diversification!

There you have it, a nice ‘Earnings Update” … We will be watching closely!

Have a great “Earnings Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Cyber Safety Lesson from a recent Virus “WannaCry”

On Friday May 12, 2017 of last week, a Malware Virus was unleashed that rendered  problems across the international globe. While not the first Virus of it’s kind, this is the most recent.

What can we learn? …… Something important!

WannaCry Virus

“WannaCry”, the odd name of this most recent virus has spread to an estimated 230k machines.  Once infected, your nice machine turns mean and asks you to deposit $300 into a bitcoin account or else deletes your files.

The ransom is doubled to $600 after three days if not paid, allowed another three days, and then if not paid, the files are supposed to be deleted.

Created by the NSA- accidentally lost

According to this NPR report the WannaCry virus was created by the NSA (National Security Agency) against many computer companies wishes, shelved for later use or research, then stolen from the NSA by a hacker.

Not withstanding the coincidence associated with an agency who’s purpose is Security, losing its own files there is an important lesson to be learned. Here is another good article from Wharton.

Lesson learned- Download those updatesWindows Update

The WannaCry virus was completely blocked by a patch from Microsoft several months ago.

The only systems affected at this time are older systems that did not do their regular updates or very old outdated systems that did not have updates.

The picture above taken was from the machine used to make this post.

Make sure you are doing your updates, either manually or automatically and do not use outdated software that does not have updates!

This certainly does not guarantee an infection free future for our machines, but at least it may stop the easy access !

Have a Great “Computer Virus Free” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

How to share your Financial life with a loved one WITHOUT giving up ANY control!

  • Think the Car keys talk is tough? What about the financial life talk?
  • Do you have a loved one that needs you looking over their shoulder?
  • Are YOU taking and extended trip overseas and need someone to monitor your financial world?
  • You are great with the financial ‘Stuff” but your spouse cares nothing of it and has NO IDEA where everything is?
  • You want your kids to have an idea where everything is located in case something happens to you but did not know how to tell them?

No problem, we have you covered!

Our Solution to all of these problemsFamily Sharing puzzle-210786_1920

First of all, our job is to carry the spirit of your wishes and by knowing everything about our situation, we can help achieve this goal. However, our in-house technology helps with easy, up to date access of all of your financial life as well.

Our New Total Vault allows others to access your financial information, but make no transactions.

If you want, we can even allow access to your Wills, Tax information or other specific items you may be storing in your vault.

We do not have to allow access to everything, only what you want them to see.

Pretty neat stuff… Just let us know if you want someone to have access and we will have you sign a simple form to give them their own log in information.

Have a Great “We’ve got your Financial Life Covered” day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

Why you need to know your Credit Score and where to get your Annual Free Credit Report

Knowing your credit score and your credit report has become increasingly important. With updates in technology and increases of consumer related fraud, we all need to keep an eye on our credit and our credit score for protection.

Why Do I need to Know or protect my score?credit-40673__340

While you may not owe anyone, anything i.e. have a loan with anyone … well done by the way….. A bad credit score can still affect items such as your automobile and your homeowners premiums… no kidding (see this  Forbes article.) We cannot blame them, there is data to check and it is their responsibility and ability to review it.

Bottom line a bad credit score or report may be costing you more money.

Where do I check my score?

As a pro-bono author for credit.com I created my own personal free account before agreeing to author a few finance related articles for them. Their service is free, handy, and delivers a monthly update of your credit score along with reasons on why it has changed, which it does frequently, as well as tips on keeping it in check.

There are multiple services such as banks, credit cards, and other financial institutions that show your credit score on a monthly basis, several of which I also receive. From my personal experience, the credit.com score aligns better with the most common score similar to getting a mortgage. The other institutions credit score is frequently far from the 300-850 FICO score most known.

How do I get a copy of my credit report?

After you get your score, you may want to get a detailed copy of your credit report. Go to www.annualcreditreport.com, which is a free service offered for your own protection by the three agencies. There are tons of sites out there that are not free and try to seduce you into paying an unnecessary monthly fee, this site has been checked and is safe.

You may request all three services or just use one and keep the other two available at a later time. This may be handy as you only get one free report per agency per year. If you stagger the reports you can inquire at different times, keep later dates open for inquiry.

If your report is good, there is likely no reason to get more than one agency report.  If your report has deficiencies you may protest from the site as it is reported.

Taking time to review your credit and credit score is easy and may save you angst and money!

Have a great “Safe Credit” day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

USA Employment Update and Consumer Analysis – NICE!

Consumers are the ultimate driver of an Economy, especially the US economy. By most estimates, the consumer and his/her spending makes up over 66% of the US GDP (Gross Domestic Production) a broad measure of economic health.

Here is an interesting analysis of the Bureau Of Labor Statistics (BLS) most recent monthly Employment Report … mentioned on our “Break In”  of our Friday post.

Employed Consumer

The highest, most blunt view of employment is the Unemployment rate, usually figured in % total unemployed.

At 4.4%, the unemployment rate has fallen to a rate many, including ourselves thought maybe possible via post great recession!

The little Economy Engine that could!

img_0792
Take this job and shove it

Confident enough to walk away from the job? Sure looks like it.

Said another way, individuals have enough confidence in finding a new job, they are not afraid to walk from their current one.

A new high soon?

 

img_0795

Job Opening- aka JOLTS

Brought to the attention of many by our current Federal Reserve Chairwoman, Janet Yellen, the job opening report also known as JOLTS report is showing clear evidence of job opportunities.

This chart helps explain why workers are not afraid to walk from their current job as well (prior chart.)

Jobs are abundant!

img_0800

Total Employment to Population

Certainly the Great Recession has had lingering effects. Focusing on the move upward since 2009, one can see the line heading in the correct direction, possibly giving confidence to those above who are leaving their current job.

Bottom line, a more confident, job opportunistic consumer economy! 

img_0794

Full Circle Now- Higher Spending? Higher GDP?

Going back to our original statement, with so much tailwind for the consumer coming from the employment of the US Economy, it would not be a stretch to think higher spending is in the cards, and a better GDP!

NICE!!

Have a Great “Healthy Consumer Economy” Monday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

French Vote Comments… Happy Cinco de Mayo and Friday…. Tennis Travels… Break In- Employment Report

Break In- This am a very positive employment report was released…while we never hang our hat on just one report, we do like the direction of this report and will have more details next week!

Thanks to everyone for the nice comments on the French Vote post earlier in the week. The polls, which we know have not been super accurate of the last few years, are giving Macron a huge lead over Le Pen…all other things equal, which they never are, this outcome would likely be calming to the capital markets.

Happy Cinco de Mayosombrero-2101560__340

As May gets going, we have had unusually cool weather here in the South and even a spring…. Last several years it was a very wet spring and then summer arrived leaving little feeling for spring. Enjoy your Cinco de Mayo today ! Cheers !!

Hopefully it is nice where you are as well… Today is a Friday, so enjoy the day and your weekend….and remember to spend time with those special in your life.

Speaking of special, an out of town flight for our first National qualified tennis tournament occurs later today and through the weekend…. No matter the outcome, darn good dad daughter time!

Have a GREAT day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com