External Factors Affecting Markets

By Scott Poore, AIF, AWMA, APMA
Chief Investment Officer, Eudaimonia Group

Markets were mixed last week as breadth continued to widen, but volatility picked up.  Several external factors seem to be affecting markets of late. The previous weekend, there was an assassination attempt on presidential candidate Trump and this past weekend, President Biden withdrew his name from the Democratic presidential ticket. So far, markets are absorbing the news calmly in early futures trading. In terms of market breadth, we need to see more movement from the Mega-cap Tech names into cyclicals, small caps, and mid-caps.  After comments made by the Fed, J.P. Morgan CEO Jamie Dimon, and presidential candidate Trump, futures on a September rate cut did dip just slightly from a high of 94% to 91%.

We are also entering the part of the year that seasonality suggests is soft for equities.  The S&P 500 Index tends to dip during this time period in years where a presidential election occurs.  While it’s still early, corporate earnings are looking good for the second quarter.  So far, 80% of S&P 500 companies have reported earnings above estimates.  We get the first look at GDP for the 2nd quarter this week and the Fed is projecting +2.7% for the quarter.  Don’t be surprised if there is more market volatility this week if seasonality holds true.

___________________________________________________________________________________________________________

Disclosures

The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.

Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. 

Past Performance does not guarantee future results.