What’s going on in the world…
Market opens mixed as the volatile price action continues. Stocks have sort of grinded sideways so far this week with a bit of an upward bias, despite the turmoil surrounding the President’s comments in Helsinki. The Market is taking things completely in stride, and has done so for well over a year. We remain in a pretty tight range, which has narrowed of late. The February lows are a distant past, but the January highs are still away from us as well. But we’re close: 2872 high, 2515 low. The 2800 level on the S&P is an area of resistance which is acting like a magnet right now. It correlates to DOW 25K. To accelerate above it and get back on track will require strong earnings, economic expansion and a cooling of the trade war. 2 out of 3 ain’t bad. We got 2 right now. It’s early in Earnings Season, but the numbers have been pretty solid. The US Economy has strengthened, though the big risk is trade. Geopolitics are the constant wildcard and the increased tariffs and souring relations overseas is acting like dumbbells for the Stock Market. Running with weights can be very tiresome. But it builds strength. Once you’ve had a chance to take a breather, your legs are stronger. You’re in better shape. It’s not fun, it’s not easy, but that’s progress. The correction is lasting longer than anticipated, which has certainly been testing investor mettle. But all things considered, this Market is holding in quite well. China and the rest of the world have seen far greater losses. The Bond Market suggests caution but no alarm bells. This has been a major recalibration. A year-end sprint is ahead. The Market is getting ready. Trade Wars and Geopolitics make the path very slippery. Slow and steady wins the race.
Mike Frazier
