Public companies are amid earnings reporting season. For most of these, they are reporting the results for the fourth quarter of last year and the full year. More than half the firms in the S&P 500 have now reported.
Remarkedly, about 80% have met or exceeded expectations. More importantly, most also see good prospects for the current year. In addition, some economic indicators have recently been ticking up; industrial production, GDP estimates, and consumer confidence.
The Bull has always preached that fundamentals inevitably win out when it comes to company valuation. They have recently come in better! This bodes well for future returns. Coronavirus, impeachment, war with Iran, fears of slowing global growth, among others, have all had impacts. But it still comes down to business fundamentals.
The Bull foresaw the potential for increased volatility in late December. Expect more but keep your eyes on what is really important; stocks are going higher. The world is awash in liquidity as central banks try to accelerate growth, the U.S. fiscal and monetary policies are very accommodative, investment alternatives are few, businesses are growing profits. Stay steady, my friends.
The Lonely Bull