Thoughts {04.05.17}

President Trump meets for the next couple of days with China's President Xi Jinping.  Besides economic discussions North Korea will likely be a center of much discussion.    North Korea has been in the news a lot lately.  Recently a high level defector has warned that North Korea would use nuclear weapons if the regime felt threatened with attack.  In that same manner North Korea has accelerated its weapons testing systems, firing another missile into the seas between it and Japan yesterday.  The US and North Korea seem to be headed towards some sort of show down on this.  I think Xi Jinping is going to be told this week that he needs to fix this problem or this US is going to consider all sorts of options that have been previously off the table.  Markets don't seem to be all that concerned about this but I think this is something for us to watch a bit more closely in the coming weeks.  President Trump is going to be tested at some point on the foreign policy front and the North Koreans seem like a pretty good candidate to be at the front of that line.

On a happier note you know that valuations on stocks are elevated right now.  One of the things that might help in that regard is that S&P earnings are expected to rise over 10% this quarter.  If that happens and we see similar rises going through the rest of 2017 then stocks PE multiple will be coming down.  It could also set the floor for a better market environment later in the year as investors become more confident that such results are sustainable.

Go read over at Bloomberg, "A Smarter Approach to Infrastructure."

Also on a happy note, the baseball season has started!  The focus here will be on the Cubs home opener next week when the players get their rings and the World Series Championship banner will be raised.  What we should perhaps first focus on in Chicago is that it is going to snow tonight.  Major bummer!

Back Friday.

*Long ETFs related to the S&P 500 in client and personal accounts although positions can change at any time without notice or dissemination on any other form of electronic media.

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