Random Thoughts

Like hurdlers at the starting blocks, investors are focused on a series of obstacles-to-optimism that must be overcome in the weeks ahead in order to maintain the market’s bullish bias.

The outcome of the upcoming FOMC meeting could disappoint some should the Fed not cut rates but should offer the encouragement of a statement that implies a more accommodative stance.

Later in the month, the G20 meeting is expected to generate plenty of photo ops, but probably won’t nudge China and the U.S. any closer to resolving their trade discord.

Finally, the upcoming S&P 500 EPS reporting period will shed light on whether the earnings recession (defined by two successive quarters of EPS declines) has been delayed or cancelled.

Currently, a y/y shortfall is anticipated for Q2 followed by nearly flat growth for Q3. Since WWII, approximately 75% of all earnings recessions preceded economic contractions.