Tag Archives: Economy

Earnings Matter, ultimately the most, let’s take a peek at how they are doing

With earnings being the ultimate driver of Capital Markets it’s always good to stick our heads down into the weeds occasionally to see how corporate managers are navigating the waters.

Our favorite go-to source for this information is from our friends at Factset, a research arm that does terrific tracking …

Here are a few charts with our notes:

This following is an estimate of Earnings for the remainder of 2019 and for the year 2020 – notice expectations are positive year over year 2018 to 2019 but not much growth is expected from the analyst community – Tariff agreement would likely change this expectation quickly…


Next up, how the change in estimates has occurred in real time – take note of the drop near the end of the year 2018 – while it looks like a larger than normal drop, and we prefer it increasing, it is only about a 5% total expected drop but again still a year over year increase as seen from the prior chart.


Lastly, we had to throw one of our favorite charts in from our friends at JPMorgan – the lagging blue line, that actually looks out of place, is the current market expansion rate – note how slow this expansion (2007-current) has been. We find this very interesting as even the 2001 expansion was at a much faster pace than our current. Could we be entering an extended period of slower, but more stable growth? This would also speak to lessened concerns of inflation and lowered expectations moving forward…


Overall, lets give corporate managers an A to almost A+, especially those dealing with overseas trading partners of any kind.

Have a Great “Update Earnings” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

Earnings Review … aka 90 day Treadmill … Revenue the missing link, found?

As mentioned Friday, earnings are the key drivers to asset growth and appreciation.  While we do not want to get into the weeds too much on this, continued growth bodes well for continued market appreciation… and maybe growth into the Frothy valuations.. From our fantastic friends at Factset.

Earnings Growth for the Immediate Quarter Looks Great

While a very short term time frame, (3-5 years is our normal time frame) this 90 day treadmill aka earning season chart shows the move upward in expected earnings growth rate. Continued movement at this rate would certainly help us grow into the current valuations.


8-4-17 Factset Earnings Growth Q217

Nice move!

EPS- Earnings Per Share

Ok, sure the EPS Earnings Per Share- solid line is moving down as time has passed for this quarter, BUT, the scale is very narrow and the amount of lowered expected EPS growth is only slightly less…

8-4-17 Factset Change in Q317 eps

Before looking too much into this, the lower line is a tiny move due to the frame size!

Revenue/Sales Growth FINALLY?

Be it the Great Recession lingering effects, demographics, economics, world growth or technological advances, Sales or Revenue has been missing during this economic recovery. In reviewing this chart, Energy, bouncing back from a much lower price just a year ago is making up much of the sales increase, however other sectors are chiming in too. Could this FINALLY be the sales increases we have all been waiting for? Compliments to all company managers for cutting expenses in order to maintain profitability, however there are only so many cuts that can be made. If sales increases continue, this would provide much needed breathing room for managers.

8-4-17 Factset Rev Growth 2017

Sales growth has been absent this recovery, making for HUGE challenges for corporate managers


Time will tell! So far its looking good!

Have a Great “Growth in Earnings” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.






Q2 2017 Newsletter Podcast and Audio Review By John Kvale

Here are a few of the topics discussed in our new Podcast, Audio Video review.

  • David Cameron Speaks at length
  • University of Michigan Sentiment Indicators
  • Updated Price Earnings Multiple
  • Three Travel Tips to save you aggravation and time

Q2 2017 Newsletter Podcast and Video Review


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.


Q1 2017 Newsletter Podcast and Audio Review By John Kvale

Here are just a few of the topics discussed in our new Podcast, Audio Video review. Due to the podcast format it is longer, but we think well worth the listen/view !

  • Taxes, Tax Deadlines, New Tax Dates, Tax Savings Ideas, Possible New Tax Rates
  • Economic Cycle Length
  • Interest Rates
  • Two cool Apps of the Quarter
  • 2016 Review
  • Managing your 401k, contribution reminders and matching stategies

Q1 2017 Newsletter Podcast and Video Review

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.


Four Positives to Keep the Perspective Clear

Seth Godin, creative thinker, inspirational motivator, author and high level thinker recently posted these charts….

In a times of negativity… these are great to recall










Good stuff…all just terrific!

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.



“Don’t You Guys Want the Market’s to Go Up?”

During a car ride yesterday somewhat fleeing the rain from our not so guaranteed sunny state visit/vacation after an almost hour-long one-sided conversation that my wife had been listening to while Donald “The Brain” and I discussed earnings, interest rates, portfolio allocations, and the current market levels, she asked the following:

“Don’t you guys want the market’s to go up?”

Stunned by the question, I thought it worth mentioning. The short answer is absolutely, we want higher prices and we always want growth. The longer answer is at a reasonable rate. If markets get too far ahead of themselves they eventually will come crashing down, not what we want.  For the record, if everything was efficient there would be a much lower ability to earn returns.

Early Earnings Update

Winners are financials, manufacturing, and industrials…so far. Losers are broadly consumer driven areas. It is still in the first or second inning, but this is our initial take!

Interest Rates

Are finally behaving! Thanks goodness!! With Bernanke’s back and forth shuffling, we think market participants have finally calmed.

Enjoy your Friday, I will be back in next week (Tuesday), but of course this is the start to another summer weekend, albeit hot is certain areas of the country (rainy in others..haha) …. ENJOY! Summer Day road

John Kvale

PS Even after an hour-long drive, the rain found its way to our so-called sunny state visit…today, no rain, overcast but no rain…we will take what we can get!

PSS Ya, ya…I told the office, the family, and everyone, I would be out and probably not post much this week….Well,  I do Love this and enjoy sharing the thoughts!!

8222 Douglas Ave # 590
Dallas, TX 75225 

Boom….Bernanke Backpedals

Markets are really getting a lift today from a question and answer session of economists in Boston last night with Ben Bernanke.

Here is the key quote:

“Highly accommodative monetary policy is what is needed for some time in the future, especially given fiscal restraint”

This is somewhat of a U-Turn from his comments just a few weeks back.

Our thought, rates moved up too quickly for his liking.

Here is the 10 Year US Treasury

10 Year Yield 7-11-13

Fundamentals will eventually win

Earnings season is about to kick off, we need to see growth to support these levels, otherwise the markets are once again Frothy.. Let’s see how we do!

Have a good day!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225 


Stunning Move in Interest Rates…..Can the Economy handle it? We think YES!

Two weeks ago we mentioned here in our “Move over Equities Fixed Income is the Boss” post that Equity/Stock markets have taken a back seat to Fixed/Bond/interest rates. Little did we know what was about to happen!

Interest Rates are in Total Control at the Moment

After Big Ben pulled the punchbowl  (which he really did not, only stated the obvious, that stimulus cannot go on forever) last week, investors have become fixated on rates, rightly so. Here is what the 10 year treasury looks like today (2.55% up a whopping .95% from just a few weeks ago.)

10 Year Yield 6-24-13

Can the US Economy take Higher Rates?

  • Higher borrowing costs
  • Higher Mortgage rates
  • Lower Profit Margins especially in heavily debt ridden companies

These are just a few examples of the effects of higher rates.

we think the economy can handle higher rates!

Our belief is that the economy, in more of a tortoise than a hare form, can handle the higher rates. IF RATES DO NOT GO TOO HIGH TOO FAST…..We will be closely watching the economic numbers but if correct, lower equity prices may present a more reasonable entry opportunity.

Break In: Did Bernanke have the Data?

I  write these posts a day or so in advance. With this week being very heavy on Economic numbers, inquiring minds want to know if Bernanke had the economic data from this week early as it has been very positive. No matter, an adjustment will be necessary by companies to accommodate the rate headwinds, again, we think we can do it!

Have a Great Day!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225

Congratulations History is made; 10 Year Treasury Breaks a Record!

Today the 10 year treasury hit an all time low of 1.62% as of just a few minutes ago. Contrary to the confident headlines you may read tomorrow, the reasons for this are various, possibly cumulative,  and no one knows with certainty. We will give you our thoughts in order of our internal probability for clarity from our side of the fence. So here we go:

  • Fear from overseas issues (Money moving from other fragile economies into ours)
  • Fear of Equity markets (Fixed income has continued positive money flow)
  • Signal of a slowdown here in the US (Low rates often signal a slower economic time)
  • The FED has won – Recall the fed wants lower rates for housing and economic growth (We think this a low probability)

Again, any or all may be reasons, but when you read the possible overconfident headlines, remember no one knows for sure!

Have a Great Day, below is the last chart of the week, we promise!

Friday we will have a fun uplifting post that a fellow professional investor quoted to start your weekend happily!


214-706-4300  www.jkfinancialinc.com

This is a two-day chart of the 10 year treasury yield. Lower chart means lower yield.

Courtesy, TC 2000.


First Quarter 2012 J.K. Financial, Inc. Performance Report Cover Letter (Clients)

Dear Investor,

Enclosed you will find your Q 1, 2012 Performance report for your perusal. As a review this report summarizes your transactions for the latest 90 days and also contains tax basis for all investments.

With the weight of the world on their shoulders, capital markets have moved dramatically from negative to positive emotions in less than one and a half quarters. Just as we were penalized last year for having negative influences resulting in very meager returns, investors have turned on a dime and declared victory resulting in overly optimistic returns in the short term, in our opinion.

Just as we made purchases when times were dark, we are sticking to our allocations and rebalancing. Given current market enthusiasm, that means selling investments that have gone up and are again out of balance as most capital markets moved in double digit form through the end of the first quarter.

While we had thought the possibility of a pay-back year was in the cards for the meager returns from last year, it is very likely market participants have once again overshot, this time to the high side. Given the election, international and domestic concerns we would not be surprised to see a pullback of 5-7% which we believe would be healthy for the capital markets and participants. We think it is a good idea to keep from being too attached to possible continued returns of this magnitude in the near future, i.e. next two quarters.

If the capital markets continue to rise with such speed and enthusiasm without major further positive data points we will follow our discipline and rebalance possibly in an even more aggressive manner.

We hope you have seen that we have a very special private client event later this month with Robert McTeer, Former Dallas Federal Reserve Chair and fellow Greenspan FOMC board member. The event is April 28th at 2 pm, and being the first of its kind, we think very timely and especially exciting given the political and economic situation of recent.

In closing, thanks very much for your continued support and we look forward to an interesting year as many items unfold.

Have a Super Spring!


John A. Kvale CFA, CFP

Enclosure (First Quarter 2012 Performance Report)