So Far So Good

From my eye earnings thus far in the current quarter have been better than anticipated across most industries. Remember, this is the down quarter most strategists and market commentators were expecting lousy earnings and revenue due to the government shutdown and crazy weather that disrupted many businesses. It appears that investors are taking the clues and forecasts from companies that results for the month of March were much better than earlier in the quarter and a better reflection of the true demand for their products and services. Good earnings and a surprising first quarter GDP number of 3.2% allowed the major averages to post a modestly higher finish to the week.

Looking ahead to this week all eyes and attention will be on Apple results on Tuesday but many important sector leaders like Alphabet (Google), Amgen, Merck, MasterCard, Advanced Micro Devices, and Qualcomm will be closely watched for clues of growth for the second half of 2019. Apple will likely continue to talk about their new services announced early in the month and try their best to get analysts to think longer term about the potential of wearables and other wireless products. After the advance in shares recently it wouldn’t be a shocker to see the stock consolidate a bit before making another move higher.

I expect good quality reports from a majority of our companies and believe many of our healthcare names will get a shot in the arm from better forecasts and will find positive footing after the reports. The last two weeks investors are focusing on companies and their fundamentals and not getting off stride from outside noise from Washington and international developments. We will see if they can stay focused with more economic data on manufacturing trends coming on Wednesday and a lot of Federal Reserve speakers on Friday.

Finally, it looks like the Chevron/Anadarko Petroleum deal is getting more interesting with Occidental Petroleum providing a higher bid allowing Anadarko to squeeze a few more dollars out of Chevron for the benefit of their shareholders. I am curious if this situation leads to more transactions in the oil patch as prices for energy stocks remain well below the recent trend of oil prices here and abroad.

Have a great week,

Roger N. Steed

April 29, 2019

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