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Today is the beginning of the astronomical summer, otherwise known as the summer solstice. The summer solstice is the perfect time as it is the longest day of the year (Americans get anywhere from four to eight hours of sunlight more than the shortest day of the year in December) and temperatures are mild (or at least less hot and humid than in July/August!). That perfection does not last forever and tends to dissipate as we progress through the summer months. Similarly, the equity markets are seemingly priced to perfection as the S&P 500 sits comfortably above the 2900 level. As we referenced in previous Weekly Headings, improving trade rhetoric with Mexico and China, a proactive Federal Reserve (Fed) attempting to ensure an ongoing economic expansion, and attractive valuations served as catalysts to propel the recent 7.7% rally (since June 3), taking the S&P 500 to a new all-time high. However, with much of this positive news now priced in and the markets susceptible to disappointment, we turn tactically more cautious on the equity market at current levels.
All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. Information has been obtained from sources considered reliable, but we do not guarantee that the material presented is accurate or that it provides a complete description of the securities, markets or developments mentioned. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Investing involves risk including the possible loss of capital. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. Past performance may not be indicative of future results.
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