It’s that time of the year we all look forward to.  No, not Thanksgiving, although we certainly look forward to that, but Q3 Earnings Season! It has begun and so far, the key data has been mixed on both economic and earnings fronts. On the ‘Up’ side Consumer Confidence was Up but the initial reading of Q3 GDP was a bit weaker than anticipated.  Some of the big names were a bit weak (such as Amazon- AMZN, Starbucks-SBUX, and Apple – APPL) but on the whole earnings have been, once again, better than anticipated.

According to Refinitiv, with over 56% of the S&P 500 Index* companies reporting, EPS growth for Q3 looks to have increased by almost 40% which is up from the prior week’s reading of 34.8%.  AND 82% of the companies that have updated their results have beaten expectations.  Finally, for the quarter, revenue growth is now forecast to be up 15.1% over the same period in 2020.

SO, it appears that investors are looking on the bright side and staying with the historical seasonal cycle script. We’ve included Ned Davis’ Chart showing the 1-year historical pattern for the S&P 500 Index, which suggests that there is more upside coming before the champagne starts to flow on New Year’s Eve.  Here’s the chart:

This of course is not a prediction, merely a chart of what things typically look like as we end a year. Here’s hoping the cycle continues!

Ron’s Market Minute

You may recall that we ended last week’s Market Minute with a comment that large cap stock indexes had broken out, and if we could see similar breakouts in small cap indexes and Junk bond indexes, we would be looking forward to blue skies in market land. 

Here’s the updated chart for the small caps- it now has also broken to the upside.

So that’ looks pretty positive. That leaves only the junk bond index (high yield index) which is wavering a bit but leaning toward a positive resolution. Cross those fingers!

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

LFS-3914115-111221

This weekly article reflects news, commentary, opinions, viewpoints, analyses, and other information developed by Denk Strategic Wealth Partners for use with advisory clients only and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email, please contact us at 602-252-8700 or by e-mail at lindaw@denkinvest.com. If you are receiving this commentary via email and would prefer not to please let us know either by email or phone.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

Please see Denk Strategic Wealth Partners’ Client Relationship Summary here http://denkinvest.com/?page_id=7099 for succinct information about the relationships and services DSWP offers to retail investors, related fees and costs, specified conflicts of interest, standards of conduct, and disciplinary history, among other matters.

LFS’ Regulation Best Interest Disclosure Document, which describes LFS’ broker-dealer services, and other client disclosure documents can be found here <https://www.lfg.com/public/lincolnfinancialsecurities/clientinformation/overview/disclosure>.

Past performance is not a guarantee of future returns.