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Blowout Earnings & GDP Moved Markets to New Highs

Thursday night earnings were released by numerous companies. Those numbers boosted the markets and the futures before the open Friday. Some of the companies included big names like Alphabet (GOOGL), Amazon (AMZN), Microsoft (MSFT) and others. Then, Friday morning before the open the GDP was reported at 3.0% and that was the icing on the cake boosting markets to record highs Friday.

Amazon reported 52 cents a share, blowing out Thomson Reuters estimate of 3 cents and adding $6 billion to Jeff Bezos' fortune making him the richest man in America! Amazon Web Services (AWS). the company's cloud business, was its main driver for growth with sales increasing 42%.

Our debt is so high and moving up each second, that interest rates above 3.5% to 4% would create a situation like Greece just went through where the government can’t pay the interest on the debt. So anyone being scared of seeing rates go crazy like in the 1980’s of 16% mortgage loans, we say that it will not happen – it simply can’t.

As Warren Buffet indicated, if rates stay low (and we think that they will) then the markets are well underpriced. We see this bull-run marching on for 2-3 more years absent a major geopolitical black swan event with the S&P now at only 70% of its actual value. Some disagree and say that the market is fully valued. We will see as time marches on.

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