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Despite various market challenges, look for more gains to come
Friday was the last trading day of the first quarter. The S&P's 13% gain since January 1 marked the best quarterly performance since 1998.
So, where do we go from here?
With this question in mind, let's turn to some of our analysts for their take. As you'll see, even though they all have unique approaches to the market, they're all eyeing more gains to come.
Let's jump in.
***John and Wade are seeing the earnings growth slowdown as just a part of a regular bull market
John Jagerson and Wade Hansen are expert technical analysts. But in Strategic Trader , they also include fundamental analysis in order to provide subscribers with a complete view of the markets. From their update last week:
***Despite some concerns, Ken Trester is looking of more gains since it's usually a losing bet to fight the Fed
With decades of experience reading markets and charts, Ken is the editor of Power Options Weekly . On Friday, he updated his subscribers with his most recent market analysis:
Ken then goes on to point toward some risks facing the market. He identifies rising inventories, which indicate that consumers are buying less goods than are being produced.
He also highlights Europe, which appears on the verge or a recession, as well as slowing growth in China.
Finally, Ken points toward a slowdown in earnings growth rates (which you've heard mentioned from both Louis Navellier and Neil George). Expectations for the first quarter are low. But Ken tells us this might actually be a good thing, since a low bar could lead to positive earnings surprises.
Despite the risks, Ken's final takeaway is bullish:
***Meanwhile, Neil George is looking at strong consumer spending as a bullish indicator
Neil is our resident income-investing expert. Whether through quality dividend stocks, bonds, REITs, or MLPs, Neil helps subscribers find safe income in the markets through his Profitable Investing newsletter.
On Tuesday, Neil pointed toward a handful of positive signs for the market:
***Louis Navellier is pointing toward weakness around the globe as a tailwind for the U.S. market
That's the take from famed investor, Louis Navellier, the editor of Growth Investor . In his update from last week, he pointed toward a slowing global economy and declining sovereign yields. The effect of this?
Though Louis thinks the opportunity set of winning stocks will be narrowing in 2019, he's still bullish on U.S. companies with strong earnings.
***Now, in all this bullishness, aren't we missing something big? What about the yield curve inversion from this week? Isn't that a bearish sign?
For any readers who aren't aware, last week, the yield curve inverted.
Let's make sure we're all on the same page about what this means.
The yield curve is a graph that shows the interest rate yield on bonds (of the same quality) over varying maturities. Most of the time, the shorter maturities have a lower yield than the longer-dated maturities. This makes sense - investors typically expect a higher return in exchange for tying up their money for a longer period.
When the yield curve inverts (short term rates are higher than long term rates), many investors see it as a sign of trouble. That's because they interpret it as meaning there's more risk in the short-term than the long-term. They see it as a sign of a looming recession.
For an alternative take on the yield curve, let's turn to Matt McCall. Matt is the editor of Investment Opportunities , where he tracks the major trends that are reshaping our world and our investment markets.
Matt points toward two important things to remember for context. The first is that that there are many short- and long-term interest rates out there. The one that inverted was the 10-year relative to the 3-month. But Matt believes the 10-year and the 30-year is far more important - and that yield hasn't inverted. In fact, the spread between those two yields is increasing, which is healthy.
Let's go back to Matt to explain the second important piece of context:
***Wrapping up, the collective take from our analysts suggests more gains to come
While the market isn't free of warnings signs (it never is), the collective takeaway is clear - stay long. Though the market could prove more challenging as 2019 unfolds, more gains are likely coming.
Have a good evening,
Jeff Remsburg
The post Bull- or Bear-Time? Here's Our Take appeared first on InvestorPlace .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
