Earnings have been nothing short of amazing

Earnings have been nothing short of amazing so far in 2017 & it could lead to a nice raise for you in 2018:

Bottom Line: By the end of last week more than half (57%) of American companies had reported their quarterly earnings reports for the 2nd quarter earnings season. The earnings results have been nothing short of exceptional. Coming into this earnings season the estimate was for 6.2% year over year earnings growth. Not only is that outstanding on it's own. It also would have led to record quarterly profits for Americans companies over the past year. Not only have companies posted record earnings. They're blowing straight through them. As of now the S&P 500 companies have posted exceptional 9.1% year over year earnings growth!

In other words, companies have posted 47% better earnings growth than the estimates that already would have resulted in record results. This is the reason that despite the failure of healthcare reform to date, and tax reform that's uncertain, markets are able to power forward to record highs. Fundamentals continue to improve faster than stock prices. That's exciting for a number of reasons. 

First you have the the obvious...Your stock market returns. If you haven't checked your retirement accounts in awhile and you're invested in stocks, you'll almost certainly be thrilled with what you see. The second is the overall economy. Profits from corporate America lead to further investment and risk taking by American companies. While much of the growth does come overseas these days, we are seeing greater investments in the US as well. Also, record earnings are leading to record dividend payouts. That's cash in your pocket as a shareholder that acts as a positive economic catalyst as well. The third is the potential for improved wage growth. Most budgets are made in the 3rd quarter. At this time last year the uncertainty with the election led to few companies aggressively making changes for 2017. With that knowledge in hand, at a minimum, the regulatory environment has improved (which is one of the top three reasons for the record profits and stock market performance - perhaps Trump's 2nd greatest achievement to the SCOTUS confirmation) - companies can be more aggressive in taking care of their best employees going forward. 

Earnings have been so good that we already have a win-win on our hands for (investors & the economy) and we could see a win-win-win real soon.

Brian Mudd

Brian Mudd

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