In The Lonely Bull

The U.S. stock market has been hitting new highs, but the action has been tepid. Investors do not seem to have much conviction as to the near-term future. The economy seems strong, most measures indicate continuing recovery, yet bond yields lately have been declining. Pressures on some commodity prices, like lumber, have eased. On the other hand, oil prices have been moving higher. What will that mean for inflation?

Then there is the Federal Reserve. Minutes from a recent meeting and commentary from some of its governors that point to consideration for a more rapid “removal of accommodation.” Is the party over? Remember, investors do not wait for the actual event, but anticipate change. They are nervous.

Over the next few weeks, public companies will report their results for the second quarter of this year. Along with commentary from managements, these may inform or simply confuse the outlook even more. It is hard to be too negative about the current state of business. So, we shall see. The Bull and his partners are intently watching. We remind ourselves that the economy never proceeds in a straight line. Our economy may simply be on one of those deviations from simple projections. We will adjust as needed. In the meantime, stay steady my friends.

The Lonely Bull

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