Northern Star Newsletter 3/29/18: Stocks Drop as Tariffs Rise
Message from Jon
This week, my family and I are taking our first family vacation in over 5 years and will be out of the country. Should you need anything, Nancy or Bambrah will be here to help you along with everyone in our back office. I will be back on Thursday so there will be no newsletter next week but not to worry, all is well in the kingdom here.
I have had a few clients and potential clients inquire as to my thoughts on the recent market conditions.
The week we had last week was a knee-jerk reaction to the whole tariff and trade topic and concerns that our trade partners would react causing a trade dispute that would escalate into a trade war. Funny how concerns grow into wars in our modern day media-sensationalistic world in which we live!
We are seeing more volatility spikes in this quarter than previously. As a matter of fact, you can see on the chart below that in 2018, we have seen the 3rd highest level of the VIX in the last 20yr history. Some would draw the conclusion that with high spikes in volatility, comes the aftermath of market crashes and while that would seem to carry some merit, it is not necessarily true during every volatility period.
(StockCharts Disclaimer:*Market data provided by: Interactive Data Corporation. Commodity and historical index data provided by: Pinnacle Data Corporation. Unless otherwise indicated, all data is delayed by 15 minutes. The information provided by StockCharts.com, Inc. is not investment advice. Trading and investing in financial markets involves risk. You are responsible for your own investment decisions.)
As I have previously commented, 2018 is slated to be a very volatile year fraught with peaks and valley's and difficult to navigate. If we show up at the end of this year with a 4-6% positive return, I would consider that a home-run with conditions like the ones we are currently facing!
According to Bloomberg today, the S&P 500 had a total return value of -3.19% ytd. Now granted, the trading year is only a quarter of the way complete and we still have a lot of grass to cover before we are finished, however, this market and it's relevant condition is not showing signs of improvement and if I was a betting man, I would say the odds of significant improvement said condition was low.
*I will be out of the country from tomorrow (28th) to Apr. 4th but my staff and everyone else at the back-office will be present and at your service.
Till we speak again, enjoy the Final Four!
Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.