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.

Denali Wealth Management

2017-Q2 Market Commentary

General Market Commentary as of June 30, 2017

Stocks continued to climb during the second quarter, as a Fed rate hike, valuation concerns, and a fluid political landscape in the U.S. didn’t dent the market. Investors remain overly cautious expecting something disastrous at any moment. The longer investors nervousness continues, the longer this bull market will run.

Bull Market

Economic data fully supports the bull market. The political and social headlines are successfully distracting investors from what really matters, corporate earnings. First quarter earnings were the best since 2011 and the second quarter estimates are looking strong. Stock returns were strong around the globe in the second quarter as emerging markets and international developed stocks outperformed U.S. stocks.

The 10-year U.S. Treasury note finished the quarter with a 2.29% yield after reaching a low for the year of 2.12% in June. The yield curve continues to flatten as the short end reacts to the Fed rate hikes and the long end celebrates low inflation. Don’t expect too much out of bonds in the third quarter.

Tot Return3-MO*12-MO*3-Year*5-Year*Closing Value
S&P 5002.57%15.46%7.33%12.21%2,423.41
Dow Jones Industrial Average3.32%19.07%8.26%10.64%21,349.63
NASDAQ Composite3.87%26.80%11.68%15.91%6,140.42

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.