S&P Up 8.5% Year to Date – On Track for 15% Plus This Year

The Nightmare of Spring Is Over and the Rest of the Year Is Looking Good

 What a nightmare quarter! But, like a nightmare, the market has woken up and shaken off the bad dreams.  The rebound has been nothing short of stunning. 

Plus, the overall growth of the stock market is now very much in line with what I expected at the beginning of the year and re-affirmed in my March 10 outlook.  I expected the S&P would be up 15 – 20% this year and the S&P is now up about 8.5% this year after 7 months.  With a nice little rally in the fall, we are on track to do at least 15%.

When I stuck to my outlook in the depths of April chaos, I was about the only person on Wall Street.  Many of my clients were skeptical.  And understandably so.  Not only would the market have to go up a lot (15% of more) in what seemed like a bad year for stocks, but we would have to do AND make up for 10 – 15% in losses.  A tall order indeed.  But, for me, the macro-outlook was quite clear, and it has proven absolutely correct.  Yes, we still have another 6 months to know for sure, but I see nothing to change that outlook at this point.

The spending bill passed by Congress (and it is very much a SPENDING bill) has cleared the way for more deficit spending stimulus and no market panic over raising the debt ceiling. 

Although Tariff Terror is still lurking out there, I suspect that, like the past, the market will be able to deal with it and President Trump will be more careful about spooking the market again.  Plus, the deals with Japan and Europe are helping to calm markets. 

However, it will be interesting to see what the New York based Court of International Trade says later this week about whether President Trump even has the right to levy these tariffs.  Most legal experts say the Court will rule an emphatic no.  But we shall see.

And, yes, I am very pleased that the US war with Iran lasted only a day and had no effect on oil exports out of the Persian Gulf. 

Enjoy a Break – We All Deserve One

Of course, we can’t be certain about anything, so I remain vigilant in watching for problems to come.  I know one very big problem is coming eventually and I know what to watch for.  But for the next few months I am resting much better. 

Hopefully, you will take some time to rest this summer at your favorite vacation spot or with friends and relatives.  We’ve been through a lot with the markets this spring.  We all could use a nice vacation and focus on the good things in life.