Examining Earnings & Yields

1. Corporate earnings

2. Treasury yields

As of April 20, about 16% of S&P 500 companies shared their results for the 1st quarter, and over 80% of them beat earnings expectations. [4] However, this solid performance has yet to impress investors. While most companies have exceeded earnings projections, their stocks haven’t reflected the growth.

On the other hand, companies that have beaten their sales projections – but missed on earnings-per-share – have dropped an average of 4.4% on their release days. [5]

Takeaway:  So far, corporate earnings are on the rise, but any companies that don’t beat estimates are experiencing considerable stock declines. [6]

The yield on 10-year Treasuries hit 2.96% – the highest point since 2014. At the same time, the 2-year yield climbed to its highest since 2008. [7] When interest rates rise, companies have higher borrowing costs, and bonds become a more enticing alternative to stocks.

Some investors are also concerned that the difference between the two Treasuries’ yields is too close. This occurrence, known as a flattening yield curve, can imply that investors are not confident in the long-term economic outlook. [8]  

Takeaway: Rising Treasury rates are worth paying attention to. If they are a symptom of a growing economy, the markets should be able to handle them. However, if questions about economic growth accompany the increases, investors may worry.

We are now in earnings season’s busiest week, when more than a third of S&P companies will release their reports. [9] Additionally, on Friday, April 27, the initial estimate of the 1 st quarter Gross Domestic Product will come out.  [10]

All this information will help deepen our understanding of where the economy stands – and what may lie ahead. If you have any questions about current data or future projections, we are available to talk.

Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on  Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

• 1 batch classic pasta dough
• Kosher salt
• Pepper
• 2 tablespoons olive oil
• 1 large clove garlic, finely chopped
• 1½ pounds ground pork
• 1 (6-ounce) can tomato paste
• 1 cup dry white wine
• ½ cup flat-leaf parsley, roughly chopped
• Shaved ricotta salata, for serving

Directions:

1. Use a rigatoni dial from a pasta press as directed to prepare pasta dough and tubular shapes.
2. Boil water in a large pot. Add 1 tablespoon of salt.
3. At the same time, heat oil and garlic on medium heat for 30 seconds in a large skillet.
4. Add pork into the skillet. Season with ¼ teaspoon each of salt and pepper.
5. Cook while breaking up pork into pieces until it is no longer pink, 5-6 minutes.
6. Mix in tomato paste and stir, 2 minutes.
7. Add wine. Simmer until the smell of wine disappears, 5 minutes.
8. Add parsley.
9. As pork continues to cook, cook pasta until it is firm, 4-6 minutes.
10. Drain pasta. Toss together with ragu. Top with ricotta salata if desired.

Recipe adapted from Good Housekeeping [11]

Strengthen Weak or Injured Knees

Taking a knee is more than a political statement. Strong, functional knees make walking, running, and moving around easier. You can incorporate knee-strengthening exercises into your routine. If your doctor gives you the green light, here are 6 exercises to help put the hop and the skip back in your step:

Tips adapted from WebMD [14]

You don’t have to become a vegetarian to help save the planet. But going without meat once a week can have an impact.

Here are some meaty facts about what it takes to get that big, juicy burger to your plate:

• It takes 1,850 gallons of water to produce a burger. Most of that water is used to grow grain to feed cattle.
• Cattle ranchers frequently clear large swaths of tropical forests for pastures.
• Ranching has led to 60% of the Amazon’s deforestation.
• Two football fields of rainforest are destroyed to produce one head of cattle.

At least 100 billion gallons of water would be saved if every American refrained from meat for 1 day.

Tip adapted from Conservation International [15]

Copyright © 2018. All Rights Reserved. 

References/Resources

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,

Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

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