Another week of gains has the S&P 500 index back near 5200.
This is really shooting a hole in the old saying about selling in May and go away.
Of late, most of the move has come on the back of lower-than-expected jobs and earnings reports that have shown better than expected cash flow and revenues with profits above expectations.
Most have been taken back from the hope of numerous rate cuts this year.
We are closer to one or none now.
The return to the normalcy of earnings reports driving multiples is welcome.
The vast majority of reports have indicated improved earnings, but projections have been relatively conservative.
This has driven indexes and averages back to record highs.
This is no small achievement with interest rates significantly higher than we have experience for almost two decades.
This week, we will get the Producer Price Index Tuesday and the Consumer Price Index Wednesday.
Those reports will probably only indicate that we are still stuck above 3% for inflation and that any thought of a rate cut by the Fed will be pushed out too late in the year.
The closer you get to the election the more difficult it becomes for the Fed to stay out of the politics.
You have already seen reports about the Trump team planning on reducing the independence of the Fed should they come back into power.
There is nothing free market about that plan.
It is similar to recent reports coming out that the current administration is considering significant tariffs on imports of EVs literally 10 times higher than the previous administration’s tariffs that were forecast to create a trade war.
The dumping of EVs and solar panels by China is no big secret.
I’m all for a global economy and freedom of choice, but all sides have to act ethically and China cannot even spell the word care.
China is in an economic war with the West.
Europe is living the consequences of dealing with a totalitarian state with its problems with the flow of natural gas from Russia.
This week we get earnings reports from Walmart and Home Depot.
There is some thought that the wealthier consumers are cutting back.
What has driven the two aforementioned companies is the merging of bricks and mortar with e-commerce.
Many are going online to purchase and then going inside to pick up purchases, avoiding shipping costs and possible theft by porch pirates.
I have turned to such practices myself.
The Magnificent 7 will still lead the pack throughout this year despite all the distractions of politics and world affairs.
I don’t see rate cuts, but not sure that is what we need anyway.
More than anything, this country needs to get past November.
No matter the outcome, I believe it will be a good end to the year with your portfolio having a realistic chance at double-digit gains.
If nothing else, that bit of savings you have in the bank will have earned you interest.
I know this sounds ridiculous but it could be much worse.
