In today’s Steady Investor, we look at what is going on in the markets and key takeaways for investors to consider, such as:
Read on to get the details!
Earnings Season Kicks Off on a Positive but Cautious Note – U.S. corporate earnings are likely to report a soft Q3, with total earnings for the quarter estimated to decline -5% on +4.2% higher revenues, according to Zacks estimates. We expect 11 of the 16 Zacks sectors to post lower earnings compared to the year-earlier period, including the high cash flow Technology sector.1 While this may appear, at first glance, like negative news, there are a few factors to note. The first is that this particular patch of weaker earnings was largely expected, coming off high comparisons resulting from strong showings in 2018 (the tax cut still working its way through). The second is that we do not expect this weakness to span into the next couple of quarters, with positive year-over-year growth expected in 2020. Finally, Q3 earnings may not ultimately be as weak as expected. It’s early days, but this week saw solid reports from some of the U.S.’s most key banks and health care companies. UnitedHealth Group, Johnson & Johnson, JPMorgan Chase, and Citigroup all reported strong earnings that added a shot of early optimism into earnings season.2
__________________________________________________________________________
How Can You Prepare for Retirement Uncertainties?
There are so many unknowns that come with planning your retirement – what if the market crashes or a medical emergency arises? No one can predict if these what-ifs will materialize—but there are simple steps you can take NOW to help ensure your secure and comfortable retirement.
Get our practical advice that is based on decades of experience and can potentially guard your retirement assets against the “what ifs” in life, including:
If you have $500,000 or more to invest, download our Retirement Uncertainties…and How to Breeze Through.3
__________________________________________________________________________
Is “Phase 1” of the U.S.-China Deal Already Falling Apart? Just last week, markets were given a confidence booster with the announcement of “phase 1” of a trade deal between the U.S. and China. What was billed as the foundation for a broader trade deal, upon further scrutiny, revealed that there were only minor concessions and promises of delayed tariffs (U.S.) and additional agricultural purchases (China). It turns out that China’s purported $50 billion of agricultural purchases – which is higher than China has historically spent – is based on conditions that the U.S. drops plans to add 15% on $156 billion of consumer goods starting on December 15. China also indicated that its agricultural spend would actually hinge on demand and market prices, which means they may have $50 billion to spend but may not ultimately go that high. Complicating matters further, the House of Representatives recently passed a bill supporting protestors in Hong Kong, 4 which could end up irritating China.
Is the Brexit Breakthrough Real? Markets were pleasantly surprised on Thursday to learn that Britain and European Union negotiators had reached an agreement on Brexit. Early indications show that a resolution was reached on the border between Ireland and Northern Ireland, which to-date had been one of the thorniest issues in negotiations. But opposition leaders are already claiming that the new Brexit deal is worse than the deal Theresa May had reached months before, and the terms and text of the deal are still subject to British Parliamentary vote, which is all but assured. It was encouraging to see two sides that were seemingly very far apart – Boris Johnson vs. EU leaders – manage to arrive at a negotiated agreement.5 Now the hard part begins.
Are Weak September Retail Sales Figures a Sign of Recession? As weak manufacturing data and negative corporate earnings in Q3 have alerted many investors to recession possibility, matters were made worse this week with softening retail sales. The Commerce Department stated on Wednesday that retail sales fell -0.3% in September as households cut spending on online purchases, cars, and building materials. The core figures correspond to overall consumer spending in the United States, which accounts for the largest share of the U.S. economy. But investors can temper their nervousness for two reasons: 1) monthly data are volatile, and we would want to see a pattern of weak spending before raising red flags; and, 2) the core figure does not include most services spending, which is where a majority of U.S. consumer dollars go.6
Just as we cannot predict exactly when the next recession will be or how these stories will pan out, we also cannot predict life’s uncertainties when it comes to retirement planning. No matter how carefully you prepare for retirement, life’s unknowns can throw your plans off track.
But you can take steps to prepare yourself and help protect your secure and comfortable retirement.
If you have $500,000 or more to invest, get our free guide, Retirement Uncertainties…and How to Breeze Through Them.7 It provides advice, based on our decades of experience, that we believe can help ensure that your golden years will be comfortable and secure.
Disclosure