Capital Expenditures & Stock PricesTraditionally, stock prices and capital expenditures have moved together with high correlation over time. - Field Of Dreams, 1989The stock market rally has been lacking something over the last several years. Conversely, if business investment ends up contracting, it would effectively take wrecking ball to the post-crisis stock market rally along with it. Looking forward, a long overdue pick-up in capital spending will be required to keep the stock market going to the upside. In many respects, the stock market rally along the way reflected the hope that capital expenditures would eventually pick up.
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IMPLICATION=POSITIVEFed policy & interest rates: We expect the Federal Reserve (Fed) to hike interest rates twice more in 2017 following last week's (March 15, 2017) well-telegraphed 0.25% hike. We have identified 16 keys for stocks?—?many of them policy related?—?for the rest of 2017 and assessed their implications forthe market. The latest reading near 58 for the ISM Manufacturing Index, historically a good earnings indicator, suggests continued earnings growth (above 50 indicates expansion). Fourth quarter earnings season was generally good, with high-single-digit S&P 500 earnings gains and supportive guidance that helped 2017 estimates hold up relatively well. IMPLICATION=POSITIVEInterest deductibility: Current tax policy enables companies to deduct the interest paid on their debt to lower their tax bill.
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collected by :Jack Luxor
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Soft Start Seen For Indonesia Stock Market
For comments and feedback: contact editorial@rttnews.comhttp://www.rttnews.comThis article appears in: Politics , World Markets , US Markets , Stocks The Jakarta Composite Index now rests just below the 5,565-point plateau, although the market is expected to open lower again on Friday. The Dow shed 4.72 points or 0.1 percent to 20,656.58, while the NASDAQ dipped 3.95 points or 0.1 percent to 5,817.69 and the S&P 500 fell 2.49 points or 0.1 percent to 2,345.96. WTI light sweet crude oil was down 35 cents to $47.69 a barrel, stuck near its lowest levels since November. The European markets were up and the U.S. bourses were down, and the Asian markets figure to follow the latter lead.IMPLICATION=POSITIVEFed policy & interest rates: We expect the Federal Reserve (Fed) to hike interest rates twice more in 2017 following last week's (March 15, 2017) well-telegraphed 0.25% hike. We have identified 16 keys for stocks?—?many of them policy related?—?for the rest of 2017 and assessed their implications forthe market. The latest reading near 58 for the ISM Manufacturing Index, historically a good earnings indicator, suggests continued earnings growth (above 50 indicates expansion). Fourth quarter earnings season was generally good, with high-single-digit S&P 500 earnings gains and supportive guidance that helped 2017 estimates hold up relatively well. IMPLICATION=POSITIVEInterest deductibility: Current tax policy enables companies to deduct the interest paid on their debt to lower their tax bill.
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collected by :Jack Luxor
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