Four Week Record is Gone
First – please read my U.S. News and World Report column that was posted today – it may be the single most important thing you read this year. Additionally, if you are a client, please be on the lookout for a personal letter from us as well on the recent market volatility.
Second – The candy is gone. Literally and figuratively.
Literally – the carnage of bite-size candy wrappers littering my home has been swept up and sent to the curb with nothing to show for it except a guilty conscience and a stretching belt.
Figuratively –the headlines out of the G-20 failed to inspire confidence that Greece and European policy makers had their act together. Another failing Wall Street firm didn’t inspire confidence either. The news that the jobs situation looked a lot less bleak than was expected was drowned out by other news as was the reduction in unemployment from 9.1% to 9.0%. As such, the markets we track were all down for the first time in over a month.
For the week, the Dow Jones Industrial Average (DJIA) lost -2.03% to finish at 11,983, the Standard & Poor’s 500 (S&P 500) lost -2.48% to finish at 1,253 and the Nasdaq Composite Index lost -1.86% to finish at 2,686. The Russell 2000 Index, which tracks the performance of small capitalization stocks, lost -1.91% finishing at 746.
Looks like we’ll wind down the third quarter earnings season on a positive note as about 90% of the companies in the S&P 500 have reported their results. There are 18 more set to report this week.
The results have been solid.
Revenues are tracking toward a respectable 11% increase when compared to the prior-year quarter. This equates to a 1% to 2% surprise to the upside. 61% of the companies exceeded their revenue forecasts (source: Thomson Reuters) as strong Emerging Markets demand offset weakness in Europe.
70% of companies in the S&P 500 beat earnings per share estimates and earnings growth is tracking toward a 17% increase (year-over-year). That equates to about a 5.5% better reading versus the expectations at the beginning of reporting season.
That’s all pretty good.
Call us for help or if you have any questions.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values.
David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
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