Contributor Since 2012
For the last week in April, most economic data coming out of the US was disappointing to put it mildly. To recap the week's economic data announcements:
However, one bright spot in recent weeks has been earnings. On Thursday, 63 companies on the S&P 500 were set to report financial results and so far this year, US companies have been beating estimates at their highest rate in two year. In fact, 80% of the 192 companies who have reported results since April 10 to the middle of last week have exceeded forecasts. Then again, Wall Street expectations have been pretty low for earnings.
Nevertheless, it's also worth considering that while the Fed has increased its outlook for growth this year, it has also cut its growth outlook for both 2013 and 2014 and it has pledged to keep interest rates at rock bottom levels until at least late 2014. This Fed policy of super low interest rates have been devastating to savers and those on a fixed income hoping to live off bank interest with the stock market and specifically stocks paying decent dividends appearing to be the main beneficiaries of the policy.
However, there is trouble on the horizon even for the stock market as the Bush tax cuts are set to expire at the end of the year and it's unlikely they will be renewed since it's an election year - meaning any investor with a short to medium term horizon would be wise to lock in their profits this year when their taxes and tax brackets are lower. Moreover, more money going to the government next year means less money going into the stock market next year as well.
Hence and anyone with a long-term horizon might want to put some investment capital to work now in strong stocks with solid dividends to look in any further gains this year while holding some money on the sidelines to take advantage of any dip in the market next year or if the economy clearly stalls. In other words, keep a close eye on NextCandle.com stock predictions along with our predictions for the stocks listed on your My Portfolio screen.
NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.