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It is Hard To Be Bearish on the Stock Market These Days!
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Stock Market
It was a pretty quiet today, with S&P 500 finishing flat at 2,801. We are still above our breakout level at 2,794, and as long as that holds I’m not overly worried what does or doesn’t happen on a given day. At the StockTwits forum last night I was telling the audience that it is hard not to be bullish on this market. Earnings thus far have been good, geez even IBM beat on both the top and the bottom line. Yeah, IBM beat on revenue, this is a company that saw something like 20 straight quarter of revenue declines.
IBM Revenue (TTM) data by YCharts
Strong Earnings
It may be a small sample size, but of the 86 companies in the S&P 500 to have reported so far, 77 have beaten estimates, and only six have missed, which of course means three have met. You want to be bearish in a market that is trading 17 times 2019 earnings, with companies beating estimates, be my guest.
Robust Economy
GDPNow is tracking second-quarter GDP growth as of July 18 at 4.5 percent! That is a tremendous amount of growth. We find out next Friday just what that number is.Â
Next Week Key
Next week will also be the week for earnings. We get all the big companies, Alphabet, Amazon, Facebook, etc. So next week will be a crucial week for the stock market, and where things go from here.
But remember inflation is low, interest rates are low, and the economy is growing, and that is the recipe for a strong stock market. Perhaps trade tariffs play into this a bit, but I also happen to think that if it hadn’t been for the trade tariff news, the market would likely be much higher than where it is. So for the most part, my feeling is most of that news has been priced in.
Next week will be a big week, and if earnings and guidance out of these companies are robust, the market will be off to the races for the balance of the year.
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.Â
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.