Welcome back to another week in the markets. Five trading days left in not only the month but the third quarter for 2016. Of course, last week the Fed’s decision to hold pat with open arms despite being widely telegraphed. The markets seemed to have overlooked the fact the Fed once again trimmed back its 2016 GDP forecast, with its all too predictable reaction of: “who cares about earnings, interest rates are staying the same!”

Ugh.

Well, we care, and in this week’s Monday Morning Kickoff we breakdown the circumstances around the Fed’s decision — don’t worry we’re not going to go into detail on Yellen’s remarks, it’s too early in the day for a drink. But more importantly, we look at the growing disparity between earnings expectations, the realities of the economy and the current valuation of the markets. Download this week’s issue at the bottom of this email or click here.
Chris Versace

Chief Investment Officer
Tematica Research
Chris Versace
Chief Investment Officer
Tematica Research

• No big shocker here, the Fed holds firm on interest rates . . . for now. 
  Let’s face it, the Fed’s role has become a cheerleader for the economy. For months we’ve heard that rates will increase, rates have to increase, the Fed won’t have any choice but to raise them . . . and then, they didn’t. The reality is, given all the economic data that’s been coming in over the transom the last month, they didn’t have any choice BUT to do nothing at this point . . .  Read More >>

• How far out of alignment are earnings expectations?
  Current earnings expectations call for S&P 500 earnings to rebound in 2017 and grow more than 13 percent year over year to $133.60 per share. As we march through upcoming September quarter earnings, we expect that forecast will come under heavy scrutiny as investors start to turn their attention past the fourth quarter and toward what’s likely to come in 2017. . . Read More >>

• Looking ahead to the week before us
  This week we get a glimpse into the health of the consumer, with a look at Personal Income and Personal Spending data. Plus, the third estimate of 2Q 2016 GDP — guess which way it’s going to be adjusted?   Read More >