Stocks finished the week on a positive note as the S&P 500 and NASDAQ stock index’s hit record all-time highs. The Dow is within 300 points of a record high and today was up 133 points to 25,790. Trading volume was lower. For the week the Dow was up about a half a percentage point and is now up about 4% for the year.
In the annual Jackson Hole Wyoming meeting of financial gurus, Fed Chair Jerome Powell gave a speech in which he said that gradual interest rate hikes will continue this year and next thanks to a strong economy that is humming along like a Tesla Model 3. The view here at Greystone is that we are in an age of disruption which, on one hand is causing fears of political chaos while on the other is sparking job creation via a strong consumer and revived manufacturing sector. There are more job openings than workers to fill the slots. Corporate earnings are rising at a 20% clip, banks are sitting on record levels of cash and reserves while deposits are rising. Gubment debt levels are worrisome for sure but the recent trend of rising energy exports is bringing money into the country which might act as an offset to the federal debt according to some researchers. All in all, the picture for investing is good and looks to stay that way for maybe another year baring any unexpected surprises.
Shares of Splunk, which is a data software company based in sunny California, posted better than expected results sending shares to a new high. The revenue figures came in 39% higher and net income was off 27% but still beat estimates. What surprised the gurus was the strong forward guidance which caused several firms to raise Splunk’s target price. Splunk has a saying which is funny. At Splunk they aim to: “Take the SH out of IT”.