The News; The Good, Bad and No Ugly

Well, folks:


We did have a bout of market jitters in the first quarter caused by fears of an all-out trade war and some non-farm payroll decreases ( that were probably weather related) that signaled an economic slowdown. In addition, some lingering speculation about the need for special counsel to investigate potential Washington misdoings helped keep the jitters alive.


However, Earnings Season, which deals with fact and not fiction, is well underway and has given us something to cheer about. With 77 companies reporting to date 57 (or 73%) have reported earnings surprises to the upside. Thirty-seven companies of that group have also gone up in value. Staying on the good news just for a minute. According to MarketWatch, dividend payments of $109.2 billion was made to investors from S&P 500 companies in the first quarter. These payments surpassed the previous all-time record.


The GDP report recorded exports up 7%, signaling the trade benefits of a weak dollar. State and local government spending increased by 3%, which was the best in this category since the 1st quarter in 2016.


Business cycles will continue and some of the immediate benefits of our new tax policy will dissipate somewhat over time. We have the benefit of 3 significant secular growth trends underway that should propel robust expansion into the future:


1. A technology revolution is underway of artificial intelligence, built on voice recognition technology that drives our phones, computers and soon our automobiles.


2.  The rapid increase in the speed of human genome sequencing will support the development of treatments for many rare diseases and the scourge of our time; cancer.


3.  Online sales technology is already being embraced by a wide swath of global consumers, which will undoubtedly change the brick and mortar retail industry in many ways we have yet to appreciate.


I expect that we will capture our share of these opportunities in our portfolio holdings.


Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is no guarantee of future results