As summer winds down, vacations come to a close, and kids head back to school, the calendar is relatively quiet in terms of major market events. And while expectations are high for a strong back-to-school shopping season, there has been little to get excited about as performance of retail stocks has lagged.
Although the calendar is fairly quiet, some of the most volatile markets have come in August and September, so we must remain watchful for risks. The volatility around escalating tensions with North Korea earlier this month provided an example of how geopolitics can weigh on markets. But historically, the business cycle has been a much more common cause of lasting downturns than geopolitics. Every event is different and no one knows which crises will escalate and which will be contained, though history provides a reassuring guide amidst some troubling headlines.
More than 200,000 jobs were created in July—as has been the case in three of the past four months. The official unemployment rate, at 4.3%, is at its lowest level since the financial crisis. And overseas, economic growth has picked up some in Europe and Japan, the outlook for China’s economy has firmed, and earnings growth has improved broadly across developed international and emerging markets.
The bottom line is the fundamental backdrop for the markets appears to remain solid. So while it may be prudent at this time to take a little risk off the table with the S&P 500 Index at all-time highs, geopolitical risks elevated, and potential near-term positive catalysts scarce, the economic expansion and the bull market for stocks may be poised to continue well into 2018 and likely beyond.
As always, please contact me with any questions you may have.
Bryan Foronjy, CFP®
Founder and Principal Wealth Manager
CA Insurance Lic. # 0F84170
Bryan Foronjy is a registered representative with, and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group LLC, a registered investment advisor. Strategic Wealth Advisors Group LLC and Foronjy Financial are separate entities from LPL Financial.
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