Category: Uncategorized

by Franklin J. Parker, CFA

It is Fed week! Investors expect no change in rates. In fact, markets expect the Fed to hold rates steady until their June 18 meeting. On the data front, we also see retail sales and industrial production this week. After last week’s surprisingly low consumer sentiment report, the health of retail sales is becoming more important.

Last week, inflation came in basically in-line with expectations, which markets reacted pleasantly to. I mentioned the 5800 level being important — were it breached prices were likely to become slippery (it was breached, and prices did become slippery). The next important level is 5500. There has been some support here, but I don’t expect it to hold without a significant change in the underlying economic data.

Again, I am affirming my view that a recession is brewing (if not already here). The tariff war is likely to be the catalyst, but the economic data has been decaying for some time now. To change my view on this, I would need to see the unemployment rate fall (due to job gains, not people leaving the labor force as has been the recent reasons for its fall), strong earnings growth, and strong retail sales.

Chart of the Week

We have discussed this figure before, but bankruptcy rates in the US have increased to recessionary levels over the last year. Starting in early 2024, we saw a 40% increase bankruptcy filings. Though that figure has come down somewhat, it still remains very elevated. As the chart shows, this expansion in bankruptcies is a tell-tale indicator of a recessionary environment (with the Covid recession being the exception).

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Employment was center-stage last week with the unemployment rate ticking up slightly to 4.1%. More surprising, however, was the mediocre job creation number of 151,000. Total job creation has been on a steady decline through last year into this one, and that is an ongoing concern. We also saw consumer credit increase in January by $18 billion — about $4 billion more than expected.

This week is an important data week, with job opening figures and the all-important inflation figure for February. Of course, all of this could easily move markets, especially the inflation figure. Fed chair Powell mentioned last week that the Fed does not need to be in a hurry to cut rates. Markets were predictably dissapointed. A higher-than-expected inflation print would easily push prices lower as investors adjust their rate-cut expectations.

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Overall, I am reinforcing my view that the economy is likely to see a recession soon, especially with the trade war gaining steam. The upward momentum in markets has stalled and, after last week’s price breakdown, perhaps begun trending downward. This week’s chart illustrates that we are likely moving into a recessionary market environment, defined by downward momentum and deteriorating economic data. I am again urging caution and possible risk controls for investors who need them. Understanding your downside risk tolerance is a layer of analysis we do here at Directional — we’d love to talk with you.

Chart of the Week

Each market environment has its own defining characteristics. In an expansion, we see strong market momentum and strengthening economic fundamentals. However, as the economic cycle comes to an end we see a long, slow deterioration of economic fundamentals, but market momentum remains strong. In a recession, market momentum finally gives way and turns downward. As the economy heals, the economic data improves, but momentum tends to lag behind.

As the chart shows, we have moved closer to the “recession” quadrant over the last month or so, largely driven by the deterioration of market momentum. Last week’s break below the key 5800 level by the S&P 500 was a bearish signal as it saw the reversal of the strong upward push we had seen over the last 18 months.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Markets have steadily deteriorated in the face of a growing trade war. As it stands, US stocks have given back all of their post-election gains. Moreover, we saw a break below the key level of 5800 in the S&P 500 today. While it is never easy to tell, this does signal to me a significant negative shift in markets.

As I have said many times, the underlying economic data is poor, despite corporate earnings being very good. With a trade war in full swing and the security of Europe in doubt, it appears investors are becoming more convinced that such strong earnings are unlikely to continue. Of course, the waning hype in AI is also contributing to investor skepticism.

Overall, I am again urging caution, as I have been for some time. We need to see economic data improving — significant job gains, a jump in retail sales, service sector expansion — for the risks of recession to really go away. That said, markets could stage a comeback were the Fed to jump in with a surprise rate cut, or if the Trump administration suddenly rolls back tariffs in a negotiation.

Chart of the Week

How tariffs affect prices is a complicated question to answer. The Wall Street Journal recently offered a very helpful analysis that demonstrated that the affects are not the same for all types of products. Generally, for products with lots of competition and little brand value, there is almost no shift in consumer prices. However, for products with only one source (like Avacados which are almost exclusively imported from Mexico), prices are likely to shift quite a bit.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Earnings continue nicely — it looks like th S&P 500 will deliver earnings growth of around 17%, which is very good. Looking ahead, analysts do not expect these above-average growth numbers to continue, with expectations for the next reports to be more like 8% to 9%. Still good, but average.

The big news last week was the inflation report which came in a bit hotter than expected, and retail sales which came in lower than expected. This, of course, is interpreted through the lens of what the Fed might do — doubts are rising about whether further rate cuts can happen in the near future. There is also concern that the US consumer is beginning to struggle.

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Overall, as I have said before, the US economy appears to be at a crossroads. Most of the underlying data is not positive, yet earnings have been strong. Investors and CEOs are worried about the impact of tariffs, but pinning down what that impact may be is difficult. In all, I am in a wait-and-see mode. I would like to see employment improve and earnings growth continue, but I am currently seeing several classic recession signals, and that does have me worried about adding risk.

Chart of the Week

There has been quite a lot of talk about the sustainability of US federal government debt. One difficulty in measuring things like “sustainability” is that there is no agreed-upon model that can tell when debts become unsustainable. As rates have increased over the past several years, the interest cost of US debt has more than doubled. As it stands, the US will be paying more than $1 trillion next year just on interest costs.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

This is a light data week, and corporate earnings reports are wrapping up. Earnings results have been very good, with companies growing earnings around 16% over this time last year. This has created a bit of a tug-of-war in markets because, while earnings have been good, the economic outlook has been worsening. “Tariffs”, for example, has been a recurring conversation in earnings calls, and most companies appear to not know what effect tariffs will have on their earnings moving forward.

Last week we saw employment data, which was worse than expected. The US created only 143,000 jobs last month, which is below the amount required to keep pace with population growth. The unemployment rate dropped, but almost entirely due to the change in population — the actual number of unemployed stayed the same (6.8 million). Consumers also appear strained after last week’s very surprising jump in credit outstanding — rather than the $12 billion expected, it appears consumers have used almost $41 billion of credit in December.

Trump’s trade war has also picked up steam. Responding to US actions, China announced 15% tariffs on several goods including trucks, natural gas, coal, and oil. Today, the administration is expected to announce 25% tariffs on steel and aluminum imports.

As I have said, the economic picture is mixed with underlying data weakening but corporate earnings coming in strong. Employment will need to improve, and earnings remain strong for my outlook to switch from “meh” to growth.

Chart of the Week

The Trump administration has repeatedly mentioned two dynamics when it comes to other countries: their trade balance with the US and their military spending. This week’s chart looks at European countries on those two axes, with military spending on the horizontal and their trade balance with the US on the vertical. The top-left corner is probably in Trump’s crosshairs as these countries export much more to the US than they import, and their spending is well below the 2% NATO target on defense.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

It appears the trade war is on. The Trump Administration imposed 25% tariffs on goods from Canada and Mexico, and 10% tariffs on goods from China. There is some hope a deal can be reached before they take effect on Tuesday, but that seems ever-more unlikely. It also appears the European Union may be next in the firing line.

Global markets have opened much lower today, and the US dollar has become much stronger. A stonger dollar has the opposite affect to tariffs by making US exports less appealing to foreign buyers (because their currency is weaker), and it makes importing stuff to the US more appealing (because your dollar can buy more stuff in other countries). In theory, currency strength can completely eliminate the impact of tariffs, but, of course, economies are very complex and dynamic machines so pinning down the net effect is impossible until after the fact.

Earnings are still in full swing, with about 1/3 of the S&P 500 companies having reported their earnings. So far, earnings growth has been very good, and with recent price drops, valuations may begin to make sense again. And, of course, last week was the Fed meeting. Powell’s commentary suggested that the Fed is content to keep rates where they are for the time being, and markets now expect cuts to resume in May.

Overall, I still see mixed signals. A trade war could well tip the US economy into recession, but we have yet to see how the US’s largest trading partners will respond to Trump’s recent policy actions. It could well be that this is a Trumpian negotiating tactic, and the tariffs (and trade war) disappear just as quickly as they came. In the end, I am still on recession watch, but, as I have said before, I may well shift my view if the data continues to improve.

Chart of the Week

A closer look at US trade with Canada shows that the entirety of the US’s trade deficit with Canada is due to imports of oil & gas. Factoring that out, the US exports more to Canada than it imports, when measured as a percentage of the Canadian economy. What’s more, when measured as a percentage of the US economy, trade with Canada has been mostly balanced, currently standing at less than half a percent of the total economy.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

It is Fed week! Invetors expect no change in rates, but everyone is listening closely for clues on path of rates. Investors are not confident the Fed will be able to continue on the same path — more likely, the Fed will keep rates steady for a longer period of time than originally expected.

We are also now firmly in earnings season. So far, reports have been strong, with companies reporting more growth than expected. Overall, analysts expect to see growth of 13% over this time last year, which is above average and a positive sign. Also this week we see some important economic data, including GDP growth for the last quarter of 2024.

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I am currently getting mixed signals. Earnings are good but stocks are still expensive, historically. Employment reports have been mixed — overall it has worsened, but not uncontrollably so —job openings have shrunk and yet consumer spending remains strong. Bankruptcies are up and yet loan defaults have not meaningfully increased. If the data would move firmly in one direction or the other, it would be helpful.

Though I am still on recession watch, I acknowledge that today is an unusual scenario and one which may elude traditional measurements.

Chart of the Week

Looking at earnings, we see that we are currently in a growth period. Earnings tend to decline leading into recessions, as does the price of stocks. However, during expansions, it is very normal for price growth to outpace earnings, which is what we are seeing now. We also see a significant price and earnings decline in 2022, which may well have been a “recession”, similar to 2015 – 2016. That said, both price and earnings can shift quickly.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Earnings season is off to a strong start. Last week the major banks reported very strong earnings, largely driven by a pickup in fees earned by advising other companies on mergers, acquisitions, and public offerings. The more important news, however, is that banks have lowered the amount of reserves for loans they expect to go bad. This is a positive development as that figure had been steadily climbing all through last year.

Inflation posted last week in-line with expectations, though still higher than the Fed would like it to be. With employment strengthening and inflation holding higher, investors are beginning to wonder how the Fed will respond.

With the inaguration today, investors will watch the Trump administration closely for clues about the regulatory regime: tariffs, bank regulations, Federal Reserve independence, and the overall business climate are all on the table. So, while this is a light data week otherwise, markets may move significantly if there are unexpected announcements.

Chart of the Week

After falling from its high of over 8%, inflation touched a low of 2.4% in 2024. The Fed had declared victory, however there are worries that this was premature. Since its low, headline inflation (which includes everything) has ticked back up and core inflation (which removes the most volatile items, like gasoline) has now moved lower. Some investors now believe the Fed lowered too quickly, and may even need to raise rates again. The next couple of months will be important to building an understanding one way or another.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

The big news last week was employment, which posted much stronger than expected. This is good news, ultimately, but markets tend to focus on how it affects the Fed’s plans for interest rates. As it stands, markets expect the Fed to keep rates where they are for a while longer.

In that vein, this week we get data on inflation. This could easily move markets around if it is much different than the 2.9% that is expected. Jobs and inflation are the two main concerns of the Fed, so seeing either of those post away from expectations is likely to move prices around quite a bit.

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As I mentioned last week (and the week before), I am now on recession watch. All of the traditional recession indicators are blinking red, and I see it likely that one starts within the next few quarters. That said, it is possible that the economy pulls higher before that happens — last week’s employment figures were a strong indicator that this could happen — and I am watching earnings very closely.

Earnings will be the final arbiter of whether the economy managed to miss a recession. At the moment, analysts expect earnings growth of 11% to 14%, which is much more in line with economic expansion. JPMorgan, Wells Fargo, Citi, and other major financials will be the focus this week. Also important in these earnings reports: the rate of loan defaults.

Chart of the Week

This week’s chart shows us the number of jobs created by industry. What we have seen over the course of 2024 is a contraction in manufacturing (green in the chart), but otherwise general growth in other industries (notice, how much Education and Health Services have grown over the past year — blue in the chart below).

It will be important to watch these figures to see if industries begin to slow down hiring (and which). For the moment, though, overall hiring remains strong and diversified.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

by Franklin J. Parker, CFA

Happy New Year!

As I mentioned in last week’s post, I am now on recession watch. Almost all of our recession indicators are blinking red, so I urge you to take steps to prepare. Of course, exactly what that means to you is entirely personal, and we should discuss it.

Last week, we got a look at manufacturing. The data improved somewhat, but US manufacturing is still in contraction. This week is important as we get a look at unemployment, a key input into the Federal Reserve’s rate policy. A point not widely discussed (until recently) is the number of long-term unemployed, which is up 50% since 2022. Many of these folks have pursued part-time work to help pay the bills and so may not even be considered formally “unemployed.” However, they are struggling nonetheless.

Again, this is just another indication that the underlying economy is not as strong as the headlines may lead us to believe.

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The future is, of course, uncertain. Just because clouds are gathering doesn’t mean there is 100% chance of rain. So, too, it is with economic forecasting. Investors within five years of their goal, however, are particularly vulnerable to excessive portfolio losses and it may make sense to put on a raincoat.

Chart of the Week

One of the main rationales for strong economic growth over the past couple of years has been strong consumer purchases. Looking at the numbers, however, we see a very different story. After adjusting for inflation, growth in retail sales has been negative, on average, for the past two years (blue line in the chart below).

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from Directional Advisors to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professionals, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.