Robert Luna, CEO and Chief Investment Strategist at Surevest, was flown out to New York to share his insights on the markets and earnings season. So far, this year is off to a great start, with the U.S. markets up mid-to-high single digits. Does the economic data support the current market increase and are valuations in line with what should be expected this year?
According to Robert, “We have seen good economic data released—the job numbers for January came in strong. A little more than 300,000 workers were hired, and more people entered the workforce.” He continued, “year-over-year wage increase came in strong, but it is not a cause for concern at the moment.” Economist were keeping an eye out for the unemployment rate to decrease, but in-fact it ticked up from 3.9% to 4.0%. Normally an increase in unemployment is not seen positively, but in this case the increase was a result of the workforce expanding and a technicality on how government workers, that were temporarily not working, were counted.
On the valuation front, Robert thinks the U.S. markets have not gotten ahead of themselves. “The forward price-to-earnings for the S&P 500 is at 15.7, which is below the 5-year average of 16.4.”
Robert said, “as long as we continue to get good supporting economic data, and valuations do not run up too high from current levels, we do not see a concern.”
On CNBC’s Nightly Business Report, Robert discussed the latest earnings from Walt Disney[i] (Ticker: DIS). The company beat analyst expectations on revenue and earnings for Q1 2019. Robert made a strong case as to why he expects Disney to continue to do well, “I think they are going to start running on all cylinders again; when you have parks and resorts, studios, and media networks, this is really a different company from the traditional media because they are able to take movies and shows and monetize them across the board. There is not another company out there that is able to do that.”
Listen in to the rest of the interview here.
[i] Robert Luna and some Surevest clients own Walt Disney in their portfolio. This is not a solicitation for this stock, and you should discuss your personal situation with a financial advisor prior to making any investments.