Market Summary
U.S. stocks finished out the week lower, as investors
continued to fret over the possibility that the U.K. may leave the European
Union on top of lingering concerns about the Federal Reserve’s reluctance to
raise interest rates. Despite the end of the week sell-off, U.S. equities managed to ward off a major slide due to early week strength in the stock market. Next week could be interesting due to the Brexit
vote and scheduled comments from Fed Chairperson Janet Yellen. A lot of
individual investors are concerned about the slow pace of U.S. economic growth
and uncertain pace of global economic growth, terrorism and global unrest,
lackluster corporate earnings, the prevailing level of valuations, the
forthcoming November elections and monetary policy. Conversely, sustained
domestic economic growth, corporate earnings and the proximity of stock prices
to their record highs encourage some market watchers. In the chart below
“risk-off” asset classes that benefit from low interest rates are far and away
the top performers for the second quarter. Uncertainty about the Fed and Brexit
will cap upside movement until there is clarity on both,” said Uri Landesman,
president of Platinum Partners. Investors are nervous so the market is likely
to remain depressed for now, he added.
Trading Strategy
An article published in MarketWatch.com reported on how the
long-anticipated “Brexit” referendum on the U.K.’s membership in the European
Union is set for Thursday. Polls released in recent weeks showed gathering
support for the “leave” vote—an outcome that many economists say would spark
widespread turmoil in global markets and possibly sink the U.K. into a
recession.
By Gregory Clay
Investment Strategist
Click here to
gregoryclay@nellaadvisors.com
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