It’s quiet. Too quiet. But this is about the time tariffs will start to become more important. We just saw what happens when things “break.” There is still a very high chance they break again. Plan accordingly, observes Robert Isbitts, founder of Sungarden Investment Publishing.
Ninety-day windows happen fast. Though not as fast as the Federal Reserve meetings coming up. Our resident Fed-watcher Jack Bowman tells me he has a countdown clock to one later this month. In days, not in minutes, I think.
It's been quite a move since I drew that purple circle during April (below) for the SPDR S&P 500 ETF (SPY), which then saw the S&P 500 rally 10%. Now, it is either stuck around here, ready to attack the all-time high about 3% north of here, or preparing to peel off and head sharply lower.
Why so much confusion? Have you seen how the markets are being swung around by every piece of news on the economy, tariffs, bond rates, etc.?
Ten years ago, the markets would have been volatile. Now, they are casino-like. But they are also full of opportunity. We just have to recognize what moves them now. Algorithmic trading, indexes dominating retail and institutional investing, and 24/7 financial media. That, and “everyone” is in the stock market now.
This is great and downright dangerous at the same time. The sheer upward pressure from flows into stocks has been THE driver the past 10 years. It is not so much earnings growth or other fundamental factors as it is a simple case of supply overwhelming demand. Over and over again, with every dip reliably bought.
That might change. If it doesn't, there's no reason the major averages can't continue to lift, at least through summer and even into next year. But along with an extended market getting more extended, the concern any investor should have if they are stock-heavy and planning to rely on that nest egg to retire or stay retired is clear: The risk of things “breaking” again.
