So, here we are heading onto one of the most important holidays of the year – Valentine’s Day – and the market is acting normal, still. “Really?” you might think. Valentine’s Day is one of the most important holidays of the year? Think about it, boys and girls …
So, yes, the market seems to have quieted down from its rebellious volatility this winter, this winter of discontent, or not. Although the economic numbers are, as they always are, up and down, the gist of the flow is fundamentally good. In fact, it is better than good looking forward into 2015.
- Wall Street Drifts Higher on German Data; S&P Touches Record
Yup, back to the future we are indeed. Germany is up economically and the S&P has returned to its former glory, and that with the Fed’s pending interest rates hike coming to a market near you this June, perhaps.
- Germany grew 0.7 percent in the fourth quarter, more than double the expected 0.3 percent, pointing to a stronger 2015 for the region’s biggest economy.
The above bears repeating because of the possible ceasefire in Ukraine. As you know, Europe has sanctions on Russia regarding this issue and Russia has retaliated with its own sanctions. It is economic warfare.
- Equities have rallied this week after a ceasefire agreement between Ukraine and Russia, and apparent progress on a deal on Greek debt in the euro zone.
So, if that conflict comes to an end with Mr. Putin’s help, Europe and Russia will lift their sanctions. Back to Germany … No country has been harder hit from Russian sanctions than Germany. Imagine a 2015 for Europe and the market with Germany unleashed.
- Still, gains may be checked on Friday with investors reluctant to make big bets ahead of an extended holiday weekend. U.S. markets are closed on Monday for the Presidents Day holiday.
Okay, so the market feels Presidents’ Day is more important than Valentine’s Day, but anyone who is in a relationship knows this is so far from reality.
No matter, the market closed or not, it will come back to a fundamental that speaks more loudly than all the economic data – earnings. On this front, things have been quiet, but here is an update that suggests good things for the market are still coming out of corporate America/World.
- Of the 391 S&P 500 companies that have reported earnings, about 71.1 percent have topped profit expectations, according to Thomson Reuters data, while 57.5 percent have beaten on revenue. The earnings growth rate for the quarter is 6.6 percent, down from an 11.2 percent expectation on Oct. 1, but up from 4.2 percent expected on Jan. 1.
Okay, everyone, have a good Valentine’s Day and for goodness sake, do not, I repeat Do Not forget the candy, the flowers, the card, and the genuinely good hugs.
Trade in the day; invest in your life …
