Thanks Again
We would not expect big problems with first quarter earnings, really, but we do expect companies' guidance to be on the conservative side. Of course, guidance will be more important than past results. Essentially, business ground to a halt with all of the tariff uncertainty. Analysts are lowering earnings projections more or less every day. Now, the big question is whether this is priced in. We do not think a 'slowdown' will be any surprise to any investor. It really depends on whether the slowdown reverses now that we have a bit more clarity on tariffs. The S&P is down 7.2% for the year, even after its 9% gain yesterday. It trades at 22X earnings. Not cheap, but not historically high, either. The other question is interest rates. They were set to come down. If tariffs are gone, they should still move lower. We think we get through this period. We might have a recession, but it now could be much lighter than it would be with tariffs. If we could definitively say tariffs are dead we would be far more bullish. As it stands, we are not there yet and this adds uncertainty. We would maintain our view that 'cautious, slow buying' is now the way to go. We saw on Wednesday how the market is a coiled spring for recovery on ANY sort of good news. We have had a volatilty spike and capitulation selling. But we have gone from 'everything is going to hell' to 'maybe things won't be so bad' and this should help the market slowly work higher, barring any other new negative developments, which of course are always possible.