Thursday’s trading sessions saw the S&P500 Index* hit a brand-new all-time closing high. Hooray! And that bit of news came in as a chaser to the Dow’s record a day earlier. That fairly reliable indicator of market volatility, the VIX, dipped down into the not-so-volatile 14-15 range and closed Thursday at 15.01. We have not seen the infamous ‘fear gauge’ that low since February of 2020!

Even as we watch the markets climb their obligatory ‘wall of worry’, we are encouraged to see that of the companies reporting earnings this week only a few point to continued supply-chain issues as being barriers to success in the upcoming quarters. Intel and IBM took some hits but our two-handed economist was quick to point to new highs at The Home Depot and Lowe’s; both bellwethers of retail activity.

It truly seems that there are not only cooler but softer winds in the air. For starters there are hints of improvements/ recovery in the supply chain debacle, and the bogeyman of that 3.5 Trillion Dollar ‘Infrastructure’ bill is likely to be chopped down to something more easily swallowed and digested. There is something of much greater impact too, at least in the near term: Covid19 – Delta Variant appears to be on the wane: Some states are reporting as much as a fifty percent drop in new cases over an average 7-day period — comparing the current month to the previous one.

In all fairness, and before I’m accused of irrational exuberance, I must mention that there are still a few clouds that remain darker than we would like. The biggest of these is Inflation. More ‘experts’ every day are saying ‘maybe this is not so transitory after all’.  Well, we’re sticking to our earlier position on this: The main element that could convert the transitory into the persistent is to take a more generous definition of the word ‘temporary’. If prices remain elevated long enough for purchasing managers and consumers to get used to them, there becomes less market pressure to reduce them. But…with Biden’s poll numbers falling disastrously low and mid-term elections coming up you can bet the administration will be doing everything in its power to get adequate lubrication into the gears of commerce. Already, lots of Americans are turning their thoughts to Joe every time they stop at a gas station.

Ron’s Market Minute – (Market Minute will return next Friday)

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
www.denkinvest.com

LFS-3881386-102221

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