Anyone who read this newsletter last week and rightfully took all to heart may well have been raising an eyebrow this week

We had been talking about the lack of volatility in the markets. We were not complaining, mind you, just pointing out that the markets had, in general, recently taken a posture of gently trending upward with little drama — even though there had been drama in the wider world that the markets could have cared about, but didn’t.

We submitted in evidence the remarkably low levels of the VIX: the CBOE index that measures market volatility (and is therefore an indicator of investor fear / confidence or, to put it another way, enthusiasm vs complacency). But then something happened that definitely grabbed Wall Street’s attention — The US Justice Department appointed a Special Investigator to take a look at just what Russia may have been up to with the 2016 US elections and what, if any, connections were there to upper level people in the Trump campaign.

Holy Moley! The Dow shed about 370 points and mid-session the VIX spiked upward by a very exciting 46 percent! The last time we saw such behavior I think was back in June 2016 when Britain voted to leave the European Union. Need we remind you that investors (and especially traders) are not fond of uncertainty?

A good recipe for curing pangs of uncertainty is to search for some data points that represent, if not certainty per se, something close to it. Fortunately, there are some useful ones readily at hand.

The latest economic data show that for the latest week initial jobless claims fell by 4000 to 232,000. That’s good. Even better is that the number is the lowest it has been since 1988. To top that, the average number of people receiving unemployment benefits has fallen to the lowest level since 1974.

So, as volatility returned to its cage, all three of the major US markets were green again today.

Granted, the moves upward on Thursday were not enough to fully compensate for Wednesday’s dip but I think Karyn Cavanaugh has the right view. Karyn is senior market strategist at Voya Financial and in an interview Wednesday she said “Investors wanted a pullback and they got one. We’re still looking forward to pro-growth policies and no matter who is in the White House, we’re still looking for pro-growth policies.”

Us too.

 

Market Minute 5/19/2017 – Spring Break

 (There is no Market Minute today owing to the fact that Ron, Pat and a few family members are having breakfast this morning on the veranda of a lovely beach house in Belize. Meanwhile we elves are dutifully minding the store here at DSWP and are here if you need us.)

 

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at info@denkinvest.com.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

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*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

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