Market Commentary, 05/11/18

As of today’s close, both the Dow and S&P are positive for 2018, with each finishing the week up over 2%. In fact, today was the seventh day in a row that the Dow closed up, its longest positive streak since February.

Last Friday I wrote, “… in recent days nearly 80% of S&P 500 companies (that have reported) have issued earnings reports that exceeded analysts’ expectations by the largest margin in almost a quarter century” and this trend is continuing. I also wrote that early last week there were, “…concerns that the Fed might raise rates faster than expected,” and that this was a stock market negative. However, in the past nine or ten days, 10-year Treasury yields seemingly stabilized below 3% … this has decreased inflation fears and has helped drive the market.

The stock market also got a boost from crude oil, which reached a three year high yesterday, and from tech stocks for which this was a very strong week. In fact, Google, Facebook, and Nvidia were all up over 5% this week (WSJ).

It’s probably too early to tell, but recent performance (i.e., since last Tuesday, 05/03/18) may indicate the market is trying to stabilize following the 12% decline from its January 26 high all-time-high … the CBOE Volatility Index (VIX), a measure of volatility often referred to as a “fear gauge,” is on track for its lowest close since early February (MarketWatch).

Geopolitically, the stock market’s long-term outlook still includes concerns about Chinese tariffs and potential trade wars but many market watchers agree that this dynamic has been priced into the market. In the shorter term, we continue to believe that economic and stock market fundamentals continue to be positive.

Wayne Copelin, CFP®
President, Copelin Financial Advisors, Inc.
514 Brooks Street
Sugar Land, TX 77478
Phone (281) 240-2902
Fax: (281) 240-2856

Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.

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