This past week was an important period for various earnings announcements. Influential technology companies like Intel, Microsoft, and Amazon all reported, and all disappointed investors in some form or fashion. Even leading healthcare companies, like Amgen and Illumina, disappointed. And yet the Market rallied strongly.
The Federal Reserve took a decidedly dovish posture on both its interest rate policy, and its balance sheet flexibility. The government shutdown is over, and the messages surrounding the trade talks with China are incrementally positive. Are headwinds about to turn to tailwinds?
Market participants are signaling that while global growth has hit a soft patch, they anticipate improvements in the back half of the year. Meanwhile, the innovation cycle that we have discussed on numerous occasions continues to run in a somewhat unabated fashion. In some ways, the investment environment feels like the early 1980’s when developments in technology- personal computers, networking, software, and ultimately the internet in the 1990’s, resulted in an extended period of investment opportunity.
This is not so say that meaningful corrections won’t occur, but rather to suggest investors maintain focus on the ultimate prize.
In other words, party on!!!!