News
Three reasons stocks will fall
By Michael O’Connor, theislandinvestor.com
I can’t recall a time in my career when the outlook was so ‘uncertain'.
I write to clarify my thoughts on the market, but right now, the market noise is deafening.
For me, the economic data points to an obvious slowdown, so my head screams ‘LIMITED UPSIDE’, but my pocket tells me I have been wrong plenty of times before.
Here are three areas I am watching that will dictate where the market goes over the coming months and how you can set up your portfolio accordingly.
1. There is an alternative
Bonds have become a genuine alternative to stocks as the equity risk premium falls.
This is already playing out. More than $100bn has flowed out of stock mutual funds and ETFs on a combined basis over the past 13 weeks, one of the worst flow collapses on record while money market fund flows surge.
The narrative is simple. Why have all your exposure in ‘risky’ stocks if you can get 5% risk-free?
2. Earnings
Company earnings drive the stock market in the long run, and higher interest rates will squeeze margins and lower corporate profits over time.
- In Q4, S&P 500 companies posted an average earnings decline of 4.9% over the same quarter a year earlier. This marks the first quarterly decline since the third quarter of 2020.
- S&P 500 profit margin fell from 13.4% in Q4 2021 to 10.8% in Q4 2022.
- Forward earnings projections have fallen from +10% to +2% over recent weeks - a trend that will likely continue, (some of this is already priced in).
As company profits fall, the price investors are willing to pay to own a part of these companies falls as well.
3. Real Estate slowdown
In the US, 'existing-home sales' have been falling for 12 months straight. January year-over-year sales were down 36.9% and are now at levels last seen during the COVID low and Great Financial Crisis.
Even with supply constraints, housing affordability is far from where it needs to be for demand to return. We need to see either a big adjustment lower in interest rates, a realistic decline in prices or some combination of the two.
In Ireland, the trend is still developing. Europe is behind the US in the rate hiking cycle, so mortgage rates are still relatively low (but rising). The housing market has remained stable as a result.
There have been some signs of a slowdown in activity but no significant price movement. The number of house sales in January 2023 was 11% lower than the same month a year earlier.
However, supply issues and a lower mortgage rate relative to the US mean we are unlikely to see any significant price declines in Ireland just yet.
As rates increase, however, I expect the Irish market to come under the same pressure we are currently seeing play out in the US.
Outlook
As we move forward, the question that determines where the stock market will go changes from:
How high will interest rates go?
to
How long can rates stay this high before something breaks?
In my opinion, any market rallies we see off the back of single data releases will be short-lived - but they will happen.
Long-lasting bull markets require rapidly expanding valuations and/or strong earnings growth. I don’t see a reason for either in the data.
Of course, this is a condensed view. If you want me to help you build out and protect your portfolio, email me mike@theislandinvestor.com or scan the QR code.
Kilcummin Men’s Shed goes jaunting!
Three jaunting cars, a gang of Kilcummin characters, two unsuspecting Americans and a few amorous stags. What could go wrong?
There was no shortage of horsepower, laughs or local characters when Kilcummin Men’s Shed descended on Killarney for a memorable morning out on Friday, October 16.
Swapping their usual surroundings for something more traditional, the lads climbed aboard three jaunting cars at the Ha-Ha before setting off through Killarney National Park.
Wrapped up in blankets and looking every inch the distinguished gentlemen, the group enjoyed the spectacular autumn scenery, fresh air and plenty of good-natured banter.
Of course, their timing couldn’t have been better. With the deer rutting season in full swing, Killarney’s famous red stags were busy roaring, strutting and competing for female attention.
Some of the Kilcummin lads reportedly recognised similar behaviour from their younger days, although others wisely maintained a dignified silence!
But the real entertainment began when one carriage picked up two American tourists from Utah.
The visitors had presumably expected a peaceful journey through Killarney’s beautiful countryside, perhaps with a bit of local history and some wildlife spotting.
Instead, they found themselves sharing a carriage with members of Kilcummin Men’s Shed, a group well able to provide their own unique brand of Irish entertainment!
Quite what the Americans made of their unexpected travelling companions remains unknown, but they’ll certainly have a story to bring home.
Meanwhile, the horses patiently carried their cheerful passengers through the park, while the camera captured plenty of smiles, laughter and a few poses worthy of a royal procession.
By the time the three-carriage convoy returned to the Ha-Ha, everyone was delighted with their morning’s adventure.
The group thanked the jarveys, their hardworking horses and everyone involved in organising the outing.
Beyond the laughs, the excursion highlighted the friendship, companionship, and community spirit at the heart of Kilcummin Men’s Shed, where getting together and enjoying life matter most.
As the lads proudly declare, “Growing old is compulsory, but growing up is entirely optional!”
As for the two Americans, nobody knows whether they’ve recovered from their unexpected introduction to Kilcummin humour. One thing’s certain: they got considerably more than the standard sightseeing tour!
New Dutch flights to connect Groningen and Kerry Airport
Tourism across Kerry is set for a boost following the announcement of direct charter flights from the Netherlands to Kerry Airport for the 2027 summer season.
Dutch tour operator BBI Travel will introduce weekly flights from Groningen Airport Eelde to Farranfore every Thursday from April 29 to September 6, 2027. The service will be operated by regional carrier Sky Alps using its fleet of aircraft.
The announcement comes following strong passenger growth at Kerry Airport, which handled 440,367 passengers in 2025 before recording a further 12 per cent increase during the first six months of 2026. The new European link will provide direct access for Dutch tourists visiting Killarney National Park, Muckross House, and the wider Wild Atlantic Way route.
BBI Travel, which has specialised in Irish travel packages since 1963, will offer combined flight, accommodation, and car hire packages. The service will run alongside the operator’s existing Monday flights to Ireland West Airport Knock, allowing open-jaw itineraries across the west coast.
Welcoming the new route, Kerry Airport Customer Service Manager Evelyn Crowley said:
“We are delighted that BBI Travel has chosen Kerry Airport as its new destination for 2027. BBI Travel has an excellent track record and more than 60 years’ experience in bringing visitors to Ireland, so this new partnership is a significant vote of confidence in Kerry and the wider south-west as a destination for Dutch holidaymakers.
“The great advantage for passengers is that they arrive right in the heart of Ireland’s tourism capital. Kerry Airport is just 15 minutes from Killarney and Tralee, on the doorstep of the spectacular Ring of Kerry and within 50 minutes of Dingle and the Wild Atlantic Way.
“Our new state-of-the-art Arrivals Hall, with modern baggage handling and passport control facilities and our staff will provide a warm and efficient welcome from the moment passengers land in Kerry.
“That convenience continues on the journey home, with a short and efficient trip through security into our spacious and comfortable Departures Lounge. Passengers can enjoy a local tipple in Peig Sayers Bar or a snack in the Sky Bar before boarding their direct flight back to Groningen.
“We look forward to working with BBI Travel and welcoming their passengers to Kerry in 2027.”
Packages and flights for the 2027 summer schedule are expected to go on sale through BBI Travel in the coming months.
Kilcummin Men’s Shed goes jaunting!
Kilcummin Men’s Shed goes jaunting! Three jaunting cars, a gang of Kilcummin characters, two unsuspecting Americans and a few amorous...
New Dutch flights to connect Groningen and Kerry Airport
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Drivers warned as deer rutting season begins
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