Things can change quickly in the world and are naturally reflected in the investment environment. The Iran War began in February, and higher oil prices, etc. caused a nearly 10% correction in the U.S. stock markets. Nonetheless, talk of a peace deal resulted in a 13-day rally this April which was the fastest market recovery in history. The optimists point to surging corporate earnings, which are expected to be up by over 15% this quarter, as well as the re-shoring of American industry and major tax refunds which project to increase over 11% from last year. Moreover, the broadening of the stock market to include small cap and value stocks and subdued interest rates are continuing positives.
In the two previous Gulf Wars, markets recovered from emotional sell offs within 3 to 6 months of the onset of wars. So, there is precedent to the April rally. We are living in unusual times and many question Washington policies. Although, it is likely more folks question the delivery and presentation of these policies. Those who have read, “The Art of the Deal”, have a greater understanding of current developments.
