April in review

In April, the stock market faced challenges, grappling with inflation an uncertain FED, ongoing robust economic data and global uncertainties across the Middle East, the RED SEA and Russian/Ukraine – add in the impending U.S. presidential election and there is a lot on the plate.

Despite all of this - there's a prevailing sense of both optimism and concern among experts regarding U.S. equities. And while it was a difficult month for stocks – The S&P ended up losing 3% up from a loss of 5.6%, while the Nasdaq (think high tech, growth) lost 2.6% but not before giving up 7.5% as we moved thru the month. The view is that the recent setbacks are temporary, believing it's merely a pause in the market's upward trend.

The latest sense is that the optimism outweighs the concern. With big asset managers having a more bullish leaning… Some experts are now predicting that by year-end, the Dow Jones could end the year up 10.5% - which would take that index to 41,200 - but remember – the Dow is only 30 names – yes they are some of the biggest names, but they are only 30 of the more than 4000 companies that are traded publicly. 

The better case is to include the S&P 500, the Nasdaq 100 and the SMID’s (Small and Mid-Caps) …. which are all expected to be up as well.   The bullish forecast calls for the S&P to end the year at 5461, the Nasdaq at 17,100 targets while the Russell has a 2175 target for year end. If this comes true – it translates into an increase of 14%, 13% and 8% respectively.

The bears on the other hand are forecasting the Dow to end the year at 37,300, the S&P to end the year at 4753, 14,650 for the Nasdaq – which means we would have an essentially flat year.

While some voices caution about the market being overvalued, others draw attention to resilient consumer spending and the robustness of the labor market as reasons for optimism. Even though there's been a slight economic slowdown (not sure I really believe that), experts remain upbeat. They anticipate a remarkable 11% growth in earnings per share for the S&P in 2024.

So, what does this mean for the long-term inventory? It suggests that despite the recent turbulence, you should stay the course, have a well-defined plan, and remain invested.  There is still a strong underlying confidence in the resilience of the economy and the potential for continued growth in the stock market.

But let's not pretend that there are NOT challenges ahead. There are!

Inflation remains a concern, Treasury funding is a concern – what will Janet bring to market and what will that do to yields? We have now seen the 2 yr. kiss and pierce 5% with the 10 yr. not far behind – and remember – a 5% 10 yr. yield will cause some investors to rethink their portfolio balance.

Expiration of tax policy is a concern, Monetary policy a concern – Is a rate hike back on the table or did Nicky T (WSJ) turn up the heat for no reason? JJ said – it is ‘unlikely’ for a rate hike to be the next move – but he did not say it was OFF the table….

And then there are the ongoing uncertainty surrounding the geopolitical events that now include the out of control ‘campus peaceful protests’ clearly funded and created by official ‘agitators’ – have been  anything BUT peaceful – - they have revealed the ugly underside of those that hate America, they have revealed more about their own racist tendencies and that is raising the flag of concern in the US – concern for our country, concerns for our citizens, concerns for our diversity and concerns for a whole generation of Americans that appear to be clueless.  

Add in the upcoming U.S. presidential election and that only adds another layer of complexity, unpredictability and distress. Leaving me once again to ask – Is this the BEST we’ve got?  Really?

However, amidst these challenges, there are opportunities for investors…... The market has shown remarkable resilience in the face of all of this adversity, and it is this resilience that will drive growth.

As we navigate through these uncertain times, let's remember the lessons of the past. History has shown us that markets are cyclical, and while there may be bumps along the way, the long-term trajectory tends to be upward.

In conclusion, while the road ahead may be bumpy, there's reason for optimism. By staying informed, remaining agile, and focusing on the long-term, we can weather the storms and emerge stronger on the other side.