May 2018 Market Update


What can you say about this stock market? It went straight up for most of January, then back down in February, and it’s been holding steady ever since. April was a month of understatement. The Russell 2000 (Small Cap Stocks) was up 1.77%, while the Dow, the S&P 500 and the NASDAQ were up a quarter point or less. So far this year two of the indexes are up and two are down, but not much either way. Politics continues to play a role in the direction of the market in the short term, though it all tends to level out in the long term. Trade tariffs, North Korea, unemployment numbers, Russia, Stormy, all seem to be swirling about the president as he seeks to do his job. They all make for a bunch of uncertainty, but they tend to work themselves out over time. So, what are the fundamentals? The economy is still growing. Jobs are still being created. Companies earnings are still rising. Unemployment is still dropping. All this is good news for the economy and the stock market. But then the federal deficit is exploding. The debt is over 21 trillion dollars now. Our national debt is more than $63,000 for every person currently residing in the United States, including the people who are here illegally. I believe if you told every person attempting to come into our country illegally to come on in, but the first $63,000 they made would have to be given to the government to pay their portion of the debt, there would be a lot fewer people trying to get here. Anyway, the bull market we are in has been going since March 10th, 2009. That is a long time for a sustained bull market. So there is good news and bad news regarding the economy and market. Each side can make a credible case for whichever way they believe it’s going to go. But we won’t know till it happens. In the meantime, we’re going to follow our indicators and make adjustments to our portfolios as we get the signals to make the changes. So hang in there with us. The fun is not over yet.