While the FOMC (Federal Open Market Committee) led by Jerome Powell have been lowering short term rates, see notes by us here, here and here….
Until just recently, longer term rates were following short term rates down…
Good News From Interest Rates
While the FOMC does control short term rates, they have much less control of longer term rates and actually by lowering short term rates they were hoping for this….
Higher long term rates are our friend … Possible reasons:
- Market participants way of being more positive
- Tariff talks proceeding
- Less fear
- Expectation of future growth
10 Year Treasury Rate
If we showed a longer term chart you would see it still has a ways to go as we are only nearing 2% – half full guys… have to start somewhere… For now, good news!
Newsletter Under Way
We have some really neat items under way for the Q 1 2020 (yikes- did we just say that) Newsletter… we have found some great Government Public sources of information that we think you will really like – now on to pulling it all together for brevity and clarity — never thought those research paper skills would be so used – Sorry to all the English teachers that did not get full effort..yes you told me so! haha
Today is a chilly Friday and Thanksgiving is just around the corner…
Have a Great Friday and Weekend!
John A. Kvale CFA. CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
Hold on … Here Come Important Valuation and Corporate Earnings Charts –
As promised, it’s always good to step back occasionally and make darn sure we are not all being Lemurs (most known for following each other without thought) and gathering together, just before we go over the cliff….
Ok, so you are about to receive a blast of charts… we will code this post Forecast so we can go back and look at the “Forecasts” later….
Is the Market (S&P 500) Expensive?
This is the trailing PE (Price Earnings Ratio) the most macro valuation measure used from our Friends at Factset !
Green dotted line represents, 5 year average, and the dark dotted line represents the 10 year average….
Answer – Not cheap, but MAYBE not as frothy as it may feel at times (present party included) – certainly have been MUCH more expensive in the past…
Remember, tariff progress may release some pent up/held on the sidelines demand!
What Areas are PROJECTED to Grow in 2020
This is what analysts are PROJECTING/Forecasting (hence our coding for future review) for the year 2020!
Recent Losers are expected to be next years winners- i.e. Energy and Materials….
What happens if Tariff Agreements are not reached? Not being negative here but we must consider this could be better or worse!
Earnings Versus Market Price Movement
You hear us say all the time, Earnings are the ultimate driver of prices… and they are….
No one says this is easy…. Earnings have been flat, but markets up….
Theoretically this should not happen … UNLESS market participants expect future earnings growth as markets are forward looking.
How about the Consumer?
Recall the consumer drives over two thirds of the economy through spending in our consumer consumption economy….
A Happy Consumer = Spending Consumer
One of the many Consumer Sentiment Indicators… University of Michigan…
Steady as she goes!
Ok … you get the point, not too bad!
We could find something really hot and really cold, but these are the biggies from a high level!
Of course we did not forget the inverted yield curve and it’s recession predictiveness … we spoke about it here, here, here and here…. more to come…
Have a Great “Lemur Checkup” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in Earnings, Earnings Season, Economy, Forecast, Investing/Financial Planning, Market Comments
Tagged Consumer Confidence, Expected Earnings, P/E, Price Earnings, University of Michigan