Denali Wealth Management

2018 Q2 Market Commentary

General Market Commentary as of June 30, 2018

The volatility introduced into the stock market earlier this year by trade tiffs and tantrums has naggingly persisted into summer. All this has played out against the background of a surging U.S. economy. While domestic growth estimates for the second quarter have risen to an annualized rate of 5 percent, double the pace set in the last quarter, the European, Chinese and Japanese economies are decelerating.

Then there’s the headwind of rising interest rates envisioned by the Fed. Add to that the potential inflationary impact of an all-out trade war, and it’s no wonder the markets are rocky.

September Considerations

By the time Labor Day hits in early September, we will have critical clarity regarding the following:

1. Whether there is a full-blown U.S./China trade war or not?

2. How many Fed rate hikes this year (Three or Four)?

3. Does North Korea continue to cooperate with the U.S.?

4. Will the “Goldilocks” economic dynamic of strong growth and tame inflation reappear?

5. Can the rise in the 10-year yield and U.S. Dollar remain “orderly” or does it cause a pullback in stocks?

Market Recap

Tot Return3-MO*12-MO*3-Year*5-Year*Closing Value
S&P 5002.88%12.17%9.63%11.10%2,718.37
Dow Jones Industrial Average0.70%13.69%10.24%10.58%24,271.41
NASDAQ Composite6.31%22.31%14.62%17.15%7,510.30

Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.

All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.

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