Good day Dear Friends from Sea Pines Plantation / Hilton Head, S.C.;
Almost 36 years ago my wife, Deona, and I were married in her hometown of Tucker, GA – after which we spent our honeymoon at Sea Pines Plantation on Hilton Head island. It was such a blur of life changing events, that we did not even think about bringing a camera, and taking pictures. All we remember were the mind’s eye honeymoon moments; many Cape Cod drinks at the pool, getting sunburnt to a crisp on our first day, Deona fending off an alligator to secure one of my golf balls on the Links at Harbour Town golf course, among others; and how special they all were. In 35+ years of marriage we never took the opportunity to return to Hilton Head Island - until yesterday. We are spending this week in Sea Pines Plantation, right on the Harbour Town yacht docks– this time with a camera! (Signature Harbour Town Plaid Lighthouse Below)
- But, I have also taken my office with me - I continue to work on my client’s behalf each day - so, please do not hesitate to call me if I can assist you in any way this week, and I will get back to you.
Fourth Quarter corporate earning’s season is coming in as expected; with continued corporate earnings and revenue growth, but at a declining positive rate…the growth of US GDP may not be sustained at the high 3.5%+ rate we have seen in recent quarters, but analysts expect a 2019 increased growth at a more temperate 3% average rate. With two-thirds of S&P 500 Index companies having reported fourth quarter quarterly results so far, corporate America has delivered solid 17% earnings growth for the quarter. However, slowing global growth and trade tensions have challenged the future corporate 2019 outlook, setting up for slower, but positive, earnings gains in the coming year…and lower, but still positive, consumer confidence for a number of reasons…
Consumer Feeling confident? Four months after reaching an 18-year high, the Conference Board's Consumer Confidence Index has dropped 18 points, its biggest such slide since 2011. Sentiment's swift decline has caused some to wonder if a drop in confidence could be self-fulfilling, as lower confidence could weigh on consumer spending, and consequently, on corporate output. I believe it has much to do with the 24/7 negativity espoused by the media in the 4th quarter of 2018, e.g., continual analyst/economist recession calls as the stock market declined, political animus, global GDP contraction, etc.; but as this negativity recedes as does low tide, consumer confidence may level, and strengthen, as do the stock markets. Wage growth is better than at any point in quite some time, as unemployment is virtually non-existent to anyone who truly wants a job, drawing those who had left the job market, back into the job search market, which increased the unemployment rate in January 2019 to 4%, after over 300k jobs were added during the month.
Continued Volatility? In a word - Yes; economists disparity of beliefs, political/shutdown, global/Brexit/China tariffs…these shock waves, in a long-entrenched bull stock market, may cause periods on uncertainty to the longest bull market in our history.
I remain cautiously positive for long-term investments in 2019.