As Markets Move Further Into Record Territory, Investors Continue To Drive Stocks Higher

Good morning.

As markets move further into record territory, investors continue to drive stocks higher … and the enthusiasm is not limited to the U.S. Global markets are also on the rise … even in Sweden – where all sorts of problems were mentioned over the weekend. Ahem.

But not all are convinced it is onward and upward from here without some sort of hiccup and subsequent indigestion.

According the CNBC, Goldman Sachs is claiming that “… investors are at ‘maximum optimism’ and have a letdown coming.” Of course, it depends on what data you care to view … but the higher we go … without an apparent catalyst … the more concerns could be raised. I caught wind of one report by Hedgopia (reported in DailyShotLetter) that claims the 4th quarter S&P 500 price-to-sales ratio is “at … highs not seen in decades” … and this includes the fourth quarter of 2000 and the peak seen in the second quarter of 2007 … just before a substantial decline.

So we look for corporate revenues (and earnings) to pick up … helping to substantiate the market’s record move … lest at some time in the future we might be looking back to today’s daily stock gains and ask ourselves “what were we thinking?”

But I am not overly concerned at the moment … as the economy appears to be strengthening … but there is one report I included today (fifth one below) that does bother me … as the claim is that two-thirds of Americans are not putting money into their 401k. Sure, there might be other savings plans they are going into … but my fear is that in coming years … many will find retirement quite unaffordable … and you have to wonder … what will people do? It is often said that people spend more time planning what to do during the winter school break than they do to plan for a time where they will not have employment income for 25 years (or so) … and, heck, no one believes that social security will be enough for adequate support.

How will a lot of Americans live? I hate to say it … and I don’t want to sound mean … but they are not moving in with me.

We have to do something to educate our kids (and, in some cases, ourselves) on the importance of putting money away for a rainy day … for no matter how nice things appear now … one day the rains will arrive.

Have a great day.

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management
610 Freedom Business Center Drive
King of Prussia, PA 19406
(610) 337-9230 ext. 6
wit@teamemerald.com

A Quick Look at the News
February 21, 2017

Joseph G. Witthohn, CFA | wit@teamemerald.com

… as of 10:59 AM today …

The question on many a mind is if the Fed will raise rates at its March meeting. Well, it seems that many indications are that they will … and … on the back of a stronger economy … no one should be surprised (Reuters)

http://www.reuters.com/article/us-usa-fed-mester-idUSKBN15Z03E

… but while the market seems to be absorbing the increasing likelihood … one concern could be the price of oil … as low prices hurt markets in the middle of last year … and unless OPEC acts, low prices might occur again (Bloomberg)

https://www.bloomberg.com/news/articles/2017-02-21/oil-in-low-30s-seen-by-abn-amro-unless-opec-extends-supply-cuts

Planning to be a teacher? Good luck with that … as during the next decade, according to one article, dog walkers will be in greater demand (Bloomberg)

https://www.bloomberg.com/news/articles/2017-02-17/dog-walkers-to-be-more-in-demand-than-teachers-in-next-decade

In a rush after dropping the kids off at school? A store in Colorado filed an application to have a drive-through marijuana window … so instead of touting “fast food” they’ll tout “fast mood.” (NYDailyNews)

http://www.nydailynews.com/news/national/drive-through-marijuana-store-opening-colorado-town-article-1.2977024

A bit of disturbing new here … as it is being reported that two-thirds of Americans are not putting any money at all into their 401ks. Certainly a live-for-the-present mentality (Bloomberg)

https://www.bloomberg.com/news/articles/2017-02-21/two-thirds-of-americans-aren-t-putting-money-in-their-401-k

… but maybe many of the younger generation are counting on an inheritance … as a whopping $30 Trillion is schedule to change hands (CNBC)

http://www.cnbc.com/2017/02/17/30-trillion-is-about-to-change-hands-in-the-us.html

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