As everyone knows, financial markets really don’t like uncertainty. They hate uncertainty even more than actual bad news (unless the bad news is exceptional in its awfulness). The reason simply being is that one can always change one’s investment strategy to match conditions: there is almost always an optimal solution to a set of known problems. However, dealing with things that might happen is a much trickier proposition.

Recently we have had something of an over-supply of uncertainty. Among the top issues have been — and still are — the Chinese tariffs issue and, on the other side of the world, Brexit. Old Blighty looks across the Channel and wonders ‘Should I Stay or Should I Go’.

Prime Minister Theresa May has done her level best to sell a deal to Parliament that would agree the protocols of separation but now it is past the 11th hour and Mrs. May has tendered her resignation, effective (apparently) June 7th. According to polls her likely replacement will be Boris Johnson who tends more to the ‘Leave’ camp than ‘Remain’. Unfortunately, in groundhog fashion, this means at least six more weeks of uncertainty.

Ron’s Market Minute — He Said, Xi Said

Stocks eased down again yesterday but there was a bit of light at the end with all three major indexes closing well off their intra-day lows. As I write this (Friday morning) markets are moving a bit higher and it looks like even odds that the week will be a gainer.

China concerns are still the dominant element of influence and we are still of the opinion that both sides are very interested in finding a way to get an acceptable deal worked out. Rest assured that any forward movement on this front will have an immediate and positive effect on Wall Street.

Meanwhile, the economy is still looking pretty good. A few reports are showing some weakness but that could be weather related. We’ll have to wait and see. We were happy to see yesterday’s Initial Jobless Claims report come in at 211k — better than the 215K expected. With record employment, record market performance and a record economy in general, relax and enjoy your Memorial Day weekend.    

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

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