Q1 2019 corporate earnings season is largely behind us and here is what we have – Intel missed, Amazon beat – 3M got decimated, Visa exceeded – Tesla got gassed but Facebook keeps getting liked. But, instead of focusing on individual companies, looking at industry segments gives a better picture of what awaits.

Here’s what we see on an industry segment level – Semiconductors are coming back after being unjustifiably selling off in Q4 2018, while the healthcare sector is under siege in 2019. Energy has been enjoying rising prices while the industrial sector is facing headwinds. Technology has been up and down but then again, it always has.

What is Q1 corporate earnings trying to tell us for Q2 and beyond? It has been a mixed q1 earnings season and that is likely to continue near term.

Future Wealth’s View

In early February, after the bloodbath in Q4 2018, in our article on Feb 3 (link is here – https://futurewealthllc.com/the-fed-my-friends-is-on-our-side/), we stated that we had begun to unwind our defensive positions in our client portfolios and moved slowly but surely into growth. The timing was just about right and since then the S&P 500 has been steadily moving up and growth stocks have been rewarded. But, surprisingly defensive stocks have also done well.

Which brings back to what lies in store for us in the next few quarters of 2019? Consumer staples, traditionally considered a defensive sector remains solid. REITs, with sizable dividends and grounded in physical assets, offers stability in times of volatility has not sold off. Utilities continue to climb but, growth stocks continue to rule.

All in all, the message from Q1 corporate earnings is cautious optimism. While we remain heavily weighted in growth in our client portfolios, our positions in defensive names remain significant. Only time will tell if our circumspect approach is right or not. But then, our primary objective at Future Wealth, to all our clients, has been and will be capital preservation.