Market Update. A Big Week for Investors and the MarketSubmitted by LWM | Linden Wealth Management LLC on July 30th, 2019
It's a busy week for economic releases, the Federal Reserve, and corporate earnings. All three will shed light on the relative strength and health of our economy. The Fed's meeting on Wednesday is the most significant event for the week. The Fed is expected to cut rates 25 bps or 1/4 of 1-percent.
The Fed and forecasters have been sending mixed signals on the strength of the economy. Equities have been on a roller coaster. In December they were on the cusp of a bear market. Today, they sit at record highs. The Fed was in the process of raising rates for a fifth time when they quickly changed course shifting to a more accommodative policy. Analysts have been predicting lower corporate earnings, but the results are better. As FactSet points out, of the companies reporting, 77% have beat estimates, above the 5-year average. Tech giant Google is a prime example beating estimates by 19%, sending its stock up 10%.
|July, 2019||December, 2018|
If you're confused, you are not alone. Had you based your investment decisions on the forecasts and estimates you would have missed the rally. Economic data can be useful when trying to figure out the direction of the economy, but not necessarily when selecting investments. That process should be left to investment plans that operate more strategically by choosing assets that solve for an investor's long-term goals and objectives.
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