Market Commentary


We are near the completion of the earnings season for the third quarter. As always the earnings beat expectations but were they good numbers? Wall Street always guides earnings lower just before the earnings for each quarter are released. They try and manage the expectations of the investors so that when the actual numbers come in they are better than expected.

Does that mean the earnings are good? Not necessarily. For 2019, the earnings are in line to be about 2% better than 2018 which is not a very good growth number. Next year the experts are guiding much higher and are not likely to get it. Corporations have actually come in with solid numbers and guidance for the next quarter is upbeat, but everything is relative. Earnings are the building blocks of stock prices and the stronger the blocks you can justify higher stock prices. Currently the blocks are strong but not strong enough to justify higher stock prices unless economies around the world including the U.S. get stronger.

The stock market might be telling us that stronger economies are coming.

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