We ended the second quarter with the United Kingdom deciding to leave the European Union. The markets closed out June unsure of how this would affect the global economy. However, July seemed to shrug off these worries with the S&P 500 jumping an impressive 3.7% last month.1 Treasury yields are still really low thanks to the ongoing economic uncertainty. Oil prices, however, have hit another bear market, down 20% since early June as WTI Crude temporarily dropped below 40/barrel again.2
The resilience of the market has been pretty impressive as July saw both the Dow Jones and S&P 500 hit all-time highs, finally breaking through some psychological investment ceilings. In previous writings, we had lamented on how the Dow has been stuck around 18,000 since 2014, so we are optimistic that hitting new highs might shake the market into making a run. There are always new problems ready to plague the economy, so hopefully the markets won’t procrastinate too long.
I was looking over my personal calendar last week and suddenly realized that this school year will be the first time I have each of my kids in completely different schools. I have one child in college, one in high school, one in middle school, and one in elementary… how is that for timing? I have been preaching on the high cost of higher education and now I am, indeed, experiencing the pain first hand. I chuckle at the thought that as one child graduates college and moves into adulthood, I’ll have another child already in college or just about to start. The cycle will continue to where I will most likely have a college student in my house for the next twelve years. Quite a revelation!
I liken this to what the markets have been experiencing. As soon as the market seems to digest one piece of economic or geopolitical news, it is followed quickly by something equally as challenging. It was Brexit last month and there will surely be something new just around the corner. This is what life is in some respects… a series of obstacles that you have to fight through to make it to a higher plain. Hopefully this is what the S&P 500 is doing right now.
Have a great August!
1 Thomson Financial
Index information is used to represent market performance, but you cannot invest directly in an index. Past performance is not indicative of future results.
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