“Unbeatable Determination”

April 22, 2013

04.22.13

Global growth concerns pressured the market last week. China reported that its first quarter GDP grew 7.7%, which was less than its expected growth of 8%. Coca-Cola and Johnson & Johnson provided some mid-week earnings support, but energy, homebuilding and commodity-related companies slumped. Lower precious metals and energy prices dragged down their respective industries, but did lay the groundwork for lower inflation and a longer-lived domestic industrial revival.

We are in the thick of earnings season, and the market is reacting in its typical schizophrenic fashion. Just over 100 of the S&P500 companies have reported. Although there have been several prominent misses [such as IBM], ~70% of reporting companies have “beaten” forecast results. Reported revenue is lagging, due to pressure on bank’s net-interest-margin, lower commodities prices and foreign exchange pressure from a stronger dollar.

In addition to earnings, economics and energy, the markets’ tone last week was impacted by the terrorist bombing during the Patriots-Day running of the Boston Marathon. Describing the personal tragedies is beyond the scope of this update, but our emergency response and investigative response was exemplary. The support of the citizenry was [and is] inspiring. Let’s observe a moment of silence and relive the scene in the Garden Wednesday evening as Rene Rancourt led the sold out audience in a unifying rendition of our National Anthem.

“America was not built on fear. America was built on courage, on imagination, and unbeatable determination to do the job at hand.”
Harry S Truman