More blowout earn­ings. What comes af­ter that?

Antelope Valley Press (Sunday) - - Business - By STAN CHOE

AP Busi­ness Writer

NEW YORK — For­get about “What have you done for me lately?” The big ques­tion in­vestors will be ask­ing com­pa­nies this up­com­ing earn­ings sea­son is: What will you do next?

Com­pa­nies are lin­ing up to tell in­vestors how much they made dur­ing the last three months of 2018, and the re­ports get go­ing in earnest this up­com­ing week with Cit­i­group and a slew of other banks on deck. Ex­pec­ta­tions are high, and Wall Street is fore­cast­ing a fifth straight quar­ter where profit growth topped 10% for S&P 500 com­pa­nies.

Mar­kets could use some en­cour­age­ment fol­low­ing the worst De­cem­ber for stocks since the Great De­pres­sion. But in­vestors are likely less in­ter­ested in com­pa­nies’ per­for­mance over the last three months as what they have to say about the trends for 2019.

Eco­nomic growth around the world is ex­pected to slow this year, and ris­ing pay­roll costs could be eat­ing into com­pany prof­its. Try­ing to judge the im­pact on prof­its, in­vestors will pay more at­ten­tion to the con­fer­ence calls that CEOS hold with an­a­lysts and share­hold­ers af­ter reporting their quar­terly re­sults.

“The mar­ket is go­ing to be very fo­cused on the calls,” said Ernie Ce­cilia, chief in­vest­ment of­fi­cer at Bryn Mawr Trust. “It’s go­ing to be about rev­enue ex­pec­ta­tions and mar­gins more than any­thing.”

An­a­lysts have been ex­pect­ing profit growth to slow for com­pa­nies in 2019 fol­low­ing their blowout 2018, when the first year of lower tax rates pro­vided a big, one­time boost. Wall Street has been slash­ing its fore­casts for 2019 profit growth in re­cent weeks

With­out the tax ben­e­fit, com­pa­nies need to ei­ther drum up more rev­enue or ex­tract more profit from each $1 in sales to push their prof­its higher. And some big name com­pa­nies have cited pain caused by other chal­lenges, such as the global trade war.

Ap­ple, for ex­am­ple, shocked Wall Street when it said this month that China’s econ­omy was slow­ing more sharply than it ex­pected and slashed its rev­enue fore­cast for the fi­nal quar­ter of 2018. Ri­val Samsung cited weak global de­mand for chips when it said it ex­pects a roughly 29% drop in op­er­at­ing profit for the fourth quar­ter.

Com­pa­nies, mean­while, are fi­nally giv­ing big­ger pay raises to their em­ploy­ees. Af­ter years of slug­gish gains, work­ers’ hourly earn­ings rose 3.2% last month for the strong­est growth since 2009. While that’s good for work­ers, it can mean lower profit mar­gins for com­pa­nies un­less they can pass along their cost in­creases to their cus­tomers. Given the slow­ing econ­omy, that may not be easy.

That’s why Wall Street is now fore­cast­ing earn­ings growth for S&P 500 com­pa­nies to drop by more than half to 7% this year from 20% in 2018. Three months ago, an­a­lysts were fore­cast­ing a health­ier 10% jump in 2019 earn­ings.

If you have a few ex­tra bucks that you don’t need for ne­ces­si­ties like rent or loan pay­ments, con­sider shopping for hap­pi­ness.

From an­cient philoso­phers to cur­rent be­hav­ior­ists, peo­ple have been pon­der­ing the link be­tween money and hap­pi­ness. Among them is au­thor Gretchen Ru­bin, who thinks about hap­pi­ness for a liv­ing. She’s writ­ten sev­eral books on hap­pi­ness, in­clud­ing “The Hap­pi­ness Project” and the forth­com­ing “Outer Or­der, Inner Calm.”

She helped think through the ques­tion of whether you can use dis­cre­tionary money to buy hap­pi­ness. Short an­swer: prob­a­bly not. But you can def­i­nitely spend money to in­crease it. A life­time hap­pi­ness shopping list might go like this.

Buy bet­ter re­la­tion­ships. It’s a re­cur­ring theme. “So if you’re spend­ing your money to broaden re­la­tion­ships, that’s a good way to spend money,” Ru­bin said. Use dis­cre­tionary money to at­tend a col­lege re­union or a friend’s destinatio­n wedding. Young

nadults of­ten ex­pe­ri­ence an in­tense pe­riod of so­cial­iz­ing, search­ing for life part­ners and net­work­ing for ca­reer op­por­tu­ni­ties — all po­ten­tial sources of hap­pi­ness. Maybe in­crease bar­and­res­tau­rant spend­ing or pay for a dat­ing app.

Buy ex­pe­ri­ences — and some things. The usual ad­vice is “buy ex­pe­ri­ences, not things.” But that re­quires a deeper dive.

n“What I find is of­ten the line be­tween ex­pe­ri­ences and things is not that clear,” Ru­bin said. A bi­cy­cle can pro­vide an ex­pe­ri­ence, and a new cam­era can pre­serve one. So buy ex­pe­ri­ences, es­pe­cially with other peo­ple, but also think about buy­ing ma­te­rial things to en­hance your ex­pe­ri­ences. Buy so­lu­tions. Also known as “throw money at the prob­lem.” “One thing that makes peo­ple hap­pier


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