Scott Krisiloff, CFA, is the CEO of Avondale Asset Management, an independent investment advisory firm located in Los Angeles. Krisiloff is the author of the firm's blog, Company Notes.
Recent statistics suggest that consumers are in pretty healthy shape, but macro uncertainty may still be causing some hesitation. The US Federal Reserve is also showing some hesitation, as it neglected to raise rates last week. And while Fed chair Janet Yellen reiterated that every meeting is a "live" meeting, there are some signs that even the Fed may be starting to expect that rates will be lower for some time more.
US Federal Reserve chair Janet Yellen set the tone for this week with a speech perceived as dovish by the market, Scott Krisiloff, CFA, observes in his latest roundup of news from the C-suite. Yellen said that policy should stay accommodative, while acknowledging that any accommodation should be removed before fully meeting policy goals. This week's post also contains a number of quotes from the recent LD Micro Invitational conference.
Earnings season slowed down last week, but conference presentations took up some of the slack. Presentations are a nice change of pace, because they tend to focus more on strategy and long-term plans. There was some positive macro commentary though coming out of these presentations: Conditions didn't change much in May.
The retail sector continued to report soft earnings last week. As retail spending moves increasingly online, it's clear that the United States has too many retail outlets, and that the industry will need to shrink over time. That could pose problems for those with investments in the sector.
Macy's was the first department store retailer to report results for the first quarter and it set a negative tone for the industry. It's not necessarily surprising that a brick-and-mortar retailer is struggling, but the extent of the deterioration did seem worse than expected.
Expectations are low, and growth will be hard to achieve because comparisons will be difficult for the next few quarters, according to recent earnings calls. Although optimism has rebounded with the markets, CEOs are still cautious, while March was a weak month for industrial markets. Capital markets have opened up for strong issues, but confidence is fragile.
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