The Market Bull – October 21, 2019
The major averages begin the week with modest gains, helped along by a decent start to the earnings reporting season, and a possible Brexit deal.
That said analysts are reducing earnings estimates for 2020, though they remain high with 10% growth expected. In contrast just 1.9% earnings growth is expected for this year. Among S&P 500 companies that have announced results, 81% beat earnings estimates so far, a near-record pace. Trade war uncertainty has put considerable pressure on revenues this year, a trend that is expected to continue into 2020.
With the Federal Reserve’s Repo Market Operations continuing the Fed’s Balance Sheet has jumped 253 billion in the last 6-weeks and exceeds 4 trillion once again. That said it remains below the all time high of 4.5 trillion seen in 2015. With the Fed’s pump priming operations now a month old and ongoing, neither the House Financial Services Committee nor the Senate Banking Committee has seen fit to hold a hearing and ask the Fed and the mega Wall Street bank CEOs why they are drinking at the Fed’s money trough again. Something isn’t right with the Fed seemingly in crisis management mode despite a booming economy, strong markets and ultra-loose monetary conditions.
Standard and Poors 500 Index closed at: 3,006.72 up 20.52
NASDAQ finished the day: 8,162.99 up 73.44
Gold ended trading at: $1,486.80 down $7.30