Exclusive Content

    If you are a client, sign in below to access exclusive content.

     

    Stocks posted moderate gains last week, as the S&P 500 added 0.52%, the Dow increased 0.42%, and the NASDAQ rose 0.56%.1 International stocks in the MSCI EAFE followed suit, gaining 0.41%.2

    We received numerous new data updates last week, and most provided positive news for the economy. Retail sales, housing starts, and industrial production all beat expectations and increased in March.3

    Amid last week’s primarily positive data updates, two key occurrences also affected markets:

    • Corporate earnings
    • Treasury yields

    A Closer Look

    Earnings Season Continued

    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

    Treasury Yields Rose

    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.

    What Is Ahead

    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 1st 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.

     

    Sources

    The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC
    © Mahoney Asset Management

    INVESTING RISK DISCLOSURE
    Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Mahoney Asset Management for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

    IMPORTANT CONSUMER INFORMATION
    This web site has been prepared solely for informational purposes. It is not an offer to buy or sell any security; nor is it a solicitation of an offer to buy or sell any security.This site and the opinions and information therein are based on sources which we believe to be dependable, but we can not guarantee the accuracy of such information.

    Representatives of a broker-dealer or investment adviser may only conduct business in a state if the representatives and the broker-dealer or investment adviser they represent: (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state’s licenser requirements.

    An investor may obtain information concerning a broker-dealer, an investment advisor, or a representative of a broker-dealer or an investment advisor, including their licenser status and disciplinary history, by contacting the investor’s state securities law administrator.

    SECURITIES: ARE NOT FDIC-INSURED/ARE NOT BANK-GUARANTEED/MAY LOSE VALUE
    This information is intended for use only by residents of CA, CT, DC, FL,, MA, MD, MN, NC, NJ, NY, OH, PA, and VA. Securities-related services may not be provided to individuals residing in any state not listed above.

    The financial calculator results shown represent analysis and estimates based on the assumptions you have provided, but they do not reflect all relevant elements of your personal situation. The actual effects of your financial decisions may vary significantly from these estimates–so these estimates should not be regarded as predictions, advice, or recommendations. Mahoney Asset Managment does not provide legal or tax advice. Be sure to consult with your own tax and legal advisors before taking any action that would have tax consequences.

    Securities offered through
    Newbridge Securities Corporation,
    member FINRA / SIPC

    Investment Advisory Services offered through
    Newbridge Financial Services Group Inc.,
    an SEC Registered Investment Adviser.

    Office of Supervisory Jurisdiction
    1200 North Federal Highway, Suite 400
    Boca Raton, FL 33432

    Toll-Free: 877-447-9625
    Phone: 954-334-3450
    Fax: 954-489-2390