Moments ago, House Speaker Nancy Pelosi (D-Calif.), flanked by the chairs of the committees of jurisdiction over the House’s impeachment inquiry over the last several months (Oversight, Intelligence, Ways and Means, Financial Services, and Judiciary) announced her intention to have the House consider two articles of impeachment against President Trump. I thought I’d provide a quick primer on what’s happened this morning and what we can expect in the days and weeks ahead.
One needn’t be a fan of Ant-Man and The Wasp to appreciate small things can pack a powerful punch. As it is with superheroes, so it is with stocks.
Former New York City Mayor Michael Bloomberg officially entered the Democratic presidential primary last week, and it didn’t take long for his opponents to react. Sen. Elizabeth Warren (D-Mass.) criticized the fact that Bloomberg, who is worth an estimated $54 billion, plans to self-finance his campaign.
Stock market returns should – and will – ultimately reflect the underlying economy, particularly the level of interest rates and corporate earnings, which means, among other things, that the calendar, Gregorian or otherwise, should have no impact whatsoever on performance. Yet, with that written, most investors are aware of the well-established pattern of seasonal strength and weakness in US stocks, specifically the market’s historical outperformance during the last few months of one calendar year through the first few months of the next calendar year and underperformance through the summer and early fall months in any particular year, performance patterns immortalized by the old Wall Street adage, “Sell In May And Go Away.”
America’s favorite home improvement program, “Fixer Upper” starring Chip and Joanna Gaines, may have gone away, but housing has come back, and that’s a big deal for the US economy.
Envestnet is excited to announce our partnership with Eversheds Sutherland. As a global top 15 law practice, Eversheds Sutherland provides the legal advice and strategic alignment that clients need from their advisors for the best outcomes. The new SEC advice standards for broker-dealers and registered investment advisors are here, and we are dedicated to helping you prepare for the compliance impact.
This won’t be pleasant but pause and think for a moment about the last time you behaved in a way that you weren’t proud of. Perhaps you were impatient with your children, gave a one-fingered salute to an inconsiderate motorist, or worse, maybe you said something truly hurtful to someone you love.
Despite President Donald Trump’s pleas for the whistleblower’s identity to be revealed – and his demand that he be given the opportunity to “interview” them – it should come as little surprise that it has largely remained under wraps. As PBS Newshour recently reported, while there is “nothing that can block Trump from revealing who” the whistleblower is, federal law is meant to prevent “intimidation of witnesses and reprisals against whistleblowers.” The president, of course, is tasked with enforcing these, and all, laws as the leader of the executive branch.
We would argue the most popular way to value individual stocks and the stock market is using earnings, with investors taking what a company or the market has earned (“reported earnings”) or what a company or the companies that make up the market are expected to earn (“estimated earnings”) and applying a multiple (“Price to Earnings” or “P/E Ratio”) to that number and arriving at how a company or the market is valued or how they think a company or the market should be valued, typically using the S&P 500 as a proxy for the broad market. Investors often disagree about what constitutes a “fair” multiple for a company or the market, but most agree a low interest rate environment supports a higher multiple, which is one of the reasons we feel the S&P 500 isn’t overvalued at 17x its next twelve month (“NTM”) earnings.
If you think a potential federal government shutdown is the only potential calamity barreling down on Washington, D.C., think again.
The US unemployment rate is worth singing about, with the widely followed and reported upon Household Survey Unemployment Rate (also known as U3) coming in at 3.6% in October, up ever so slightly from its 50-year low of 3.5% in September. For those who question how representative the Household Survey Unemployment Rate is of today’s US labor market, we would point you toward the less widely followed and reported upon but much more comprehensive U6 unemployment rate, also known as Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time For Economic Reasons, As A Percent Of All Civilian Labor Force Plus All Marginally Attached Workers.
It has been a difficult year for major tech companies. To demonstrate, consider what the news and polling firm Morning Consult wrote in June 2017: Google and Facebook “are enjoying high favorability ratings among U.S. consumers …”