Thoughts {06.28.18}

A few quick hits as I have to be out this afternoon and will be on the road tomorrow.

There has been a pick-up in market volatility so far in 2018 as compared to last year.  A lot of that has to do with often and seemingly contradictory economic announcements coming out of the White House.  This has been most pronounced when discussing trade.  Frankly the Administration seems to be all over the board on the subject, particularly in its application regarding threatened sanctions and tariffs.  Probability would suggest that this will continue over the summer with markets and particularly certain sectors to continue to be buffeted by the fallout.  

Bank stocks and financial sectors have been down now for something like thirteen straight days until today.  This is unprecedented and is likely worrying some investors.  It is probably contributing to the general angst in stocks right now.

For all the commotion we've seen recently, the markets are still firmly stuck in that trading range we've discussed many times this year.  We're oversold now and tomorrow is the end of the 1st  half of the financial year so probability suggest we may see some support come into stocks the rest of the week and early next.  With the 4th of July falling on a Wednesday trading could be light and funky all of next week.  It may be hard to get a read on things until we're done with the upcoming holiday week over the 4th.

I think there's a possibility that the market is starting to experience a few headwinds that have the potential to impact things between now and sometime in the fall.  I want to take some time to gather my thoughts on this so expect something a bit more detailed in a future post.  What I would say today is that I think investors should take the time and opportunity that a slow period such as next week may afford to go over their portfolios and review their risk profile.  For some a more defensive profile may be warranted. I'm still quite bullish longer term but I think we have the potential for more volatility in the coming weeks and months, possibly at least until the mid-term elections get sorted out in early November.  Again, we'll have more on this in a future posting.

Back early next week.

*Long ETFs related to the financial sector in both client and personal accounts.  We reserve the right to change these investments without notice on this blog or via any other form of verbal, written or electronic communication.