Despite ongoing financial stress emanating from the likes of Turkey and other emerging market economies in recent weeks, the US stock market (S&P500) managed to finally inch above the prior all-time highs set back in January. If that alone doesn’t speak to how resilient is the US stock market, it is also worth mentioning the political environment remains extremely challenging for Trump & Co., and by all expectations would signal that mid-term elections in November will result in a shift of control in Congress. Such an outcome would seem likely to further reduce what is already limited political capital for the balance of his 4-year term if not create increased uncertainty of impeachment. At the same time, weakness in international markets implies the globally synchronized growth story is dead just 12 months after it was first embraced and international was believed to be a better value and return opportunity. Most discussed this week however is that the current bull market being enjoyed in the US just became the longest such run in history, stealing the title from the 9.5 year period encompassing October 1990 to March 2000. This current run is not yet as powerful in terms of gains as the former, but make no mistake that the age of this run will be more loudly cited as one of the most compelling reasons to anticipate its end.
It was another eventful week around the globe, with broad but uncertain implications for financial markets. Most notable is escalating financial and economic turmoil in Turkey, which feels at least a little similar to episodes sourced in Greece or Italy in the recent 8 years; the term “contagion” spiked in financial searches on Friday and again being discussed is the interconnectedness of global finance. Since the beginning of 2018, the Turkish Lira (currency) has lost -41% against the US dollar and inflation in the country hit 16% last month. The S&P skidded -0.74% on Friday, but finished the week down just -0.2% and remains firmly positive month-to-date. All told, major US indexes are managing to absorb the unexpected potholes in the road so far and remain in close proximity to the all-time high levels last observed in January; but these headlines may mean a firmer ceiling on attaining new highs is imposed. At the same time, international markets continue to be a significant drag on investors committed to the discipline of maintaining some international diversification.Continue reading
“Extremist,” the word and its meaning, is not usually considered in a positive light. The term usually carries a negative connotation when describing a person (or group); one which attempts to bring about change using extreme methods. An “extremist” could be one who favors or resorts to immoderate, uncompromising, or fanatical methods of behavior to the point of being radical. Synonyms for “extremist” include fanatic, radical, zealot, agitator, revolutionary, die-hard, or ultraist. Yet some of the most historically significant moments and events are defined by individuals and organizations that were termed “extremist” – countless names/groups come to mind that could be categorized this way.