Transcript:
Tom Vaughan:
Everybody, welcome to Monday, the S&P 500 was down 2.95%. Today, the big story, of course, was the price of oil. And the fact that over the weekend, there was lots of countries talking about the possibility of avoiding the use of oil and gas out of Russia, which of course, would, you know, diminish the world’s supply and drive up price as far as that goes. And so what we’ve got now those kind of interesting, I think, you know, we need to put this in perspective for where the market is, number one year to date, the S&P 500 is down 11.9%, which is not an unusual downturn amount in total, if you go from the very highest point beat last year, during the middle of the day, to the various lowest point on 24th of February, when the invasion started, it was a 14.6% drop. And so we bounced back, and we have not got back down to that low that we hit back in February, I’m pretty certain we’ll get back and challenge that. But if you look historically, at these rates of return on the S&P 500, you go back to World War Two to now there’s been 29 downturns between 10 and 20%, which is where we’re at now. And so they’re not infrequent, they’ve happened, you know, fairly often. And the average recovery, not the time for those is four months again, historically. So we’ll have to see how this one plays out.
But without a recession attached, you generally don’t have as big a downturn. So we really want to concentrate on how this potential situation in Ukraine and or what the Federal Reserve is doing can impact company earnings. And we have to be careful, because a lot of times, there’s things that we think will impact company earnings, and then they happen. So the third quarter before that we were hearing about inflation was going to impact company earnings company earnings went up 36% year over year, and in the fourth quarter heard the same thing had high inflationary number, it’s going to impact the company’s, they’re going to have less profits, profits went up 29% in the fourth quarter, and now we’re hearing that, you know, oil oils going up and energy costs going up. And that could impact company profits. Again, if they’re able to continue to raise the price of their services and products to meet the increased cost of producing those servers and products, you’re not going to see that impact company earnings. So it really has to do with how long can this go? There is a lot of money in our economy that’s floating around, people have been on average willing to pay more for some of these things. But you can only push that so far. So something we have to watch for as far as that goes. But things are still okay on the economic side as far as I’m concerned. And we’re gonna have to see how this whole thing plays out. But definitely another interesting dynamic with is Ukraine situation to add to the overall dynamics that we already had before. So lots of thoughts of things to watch right now as far as that goes. So anyway, look forward to talking to you tomorrow, and we’ll see what’s going to happen then. Thank you very much.