So, the market made it through the month of May in a stunning fashion after being tested early in the month. Major indices came roaring back as investors began to pay more attention to fundamentals than the avalanche of doom and gloom.The administration is fighting back against unfair trade relationships that have facilitated millions of jobs leaving the United States, but making power players, including Wall Street, billions of dollars. So, the establishment hates it and wants everyone else to hate the notion of fighting back, too.
It’s remarkable, a nation born of unfair trade relationship and taxation without representation is supposed to accept current arrangements.
It’s also mind boggling to me the idea America will lose in an enhanced trade war when we have the largest economy in the world, and we are the most resilient people in the world when we have to be. The good news is our foreign trading partners know this more than some Americans know or will admit.
Stock Market
The stock market rally in 2017 was mostly a function of a handful of stocks powering higher, but that’s beginning to change as opportunities are being seen in more pockets. Moreover, these other ideas have less risk and volatility, which is a critical consideration when investing.
Friday Breadth NYSE & NASDAQ
- Advancing 4,170
- Declining 1,745
- New 52-Week High 321
- New 52- Week Low 84
- Advancing volume 4.1 billion
- Declining volume 1.7 billion
Momentum & Message of Market
While I have lamented in this report, and several others this year, about the fact the market is not reflecting economic success and long-term trends, there is one index that has picked up fundamentals. The Russell 2000 continues to outperform, reflecting the fact global growth is slowing even as America’s growth continues to pick up steam.
We’ll get factory orders later today and the JOLTS report tomorrow. For now, however, in the aftermath of the jobs report, it's clear that the US economy is rocking.