In June the stock market posted a very nice rally, which is not usually the case in most Junes. NASDAQ, the S&P 500 and the Russell 2000 all almost made it back to the numbers they'd posted at the end of April, while the Dow exceeded it by a scant 7 points to end at 26,600. So over the last two months the broad stock market moved sharply lower, then sharply higher to wind up in about the same place. And that's how it goes sometimes. Our managed accounts posted small gains over that time, making up some ground we gave up at the beginning of the year. We have been working hard to make all our models more responsive. It looks like we may be seeing some results of that work.
What are the prospects for the stock market for the rest of 2019? As we all know, politics has little to do with the long-term direction of the market, but is has a major influence on what happens short-term. Last month, Iran almost started a war with the US over shooting down a military drone. China upped the ante regarding the trade dispute we have with them. And the talks we were having with North Korea over their denuclearization had come to a halt. President Trump, going against the advice from his Generals, halted a retaliatory strike against Iran that could, and probably would, have started a shooting war with them. He met with Chinese President Xi and stopped the escalation, at least temporarily, of the tariffs on each other's goods. Then he made an unprecedented move by meeting North Korea's leader Kim at his border with South Korea and stepped over into Kim's country for a few minutes. All these moves were meant to calm the waters and get stalled talks restarted. The mess at our southern border is still there, and growing, and the election next year has started early thanks to a very crowded Democratic field of candidates. If our geopolitical relationships don't blow up we may see an overall good year for 2019 in the stock market. If they do, we will be ready to adjust our portfolios to hopefully get our clients' assets out of harms way. But let's all hope and pray that doesn't become necessary.