Anyone who read this newsletter last week and rightfully took all to heart may well have been raising an eyebrow this week

We had been talking about the lack of volatility in the markets. We were not complaining, mind you, just pointing out that the markets had, in general, recently taken a posture of gently trending upward with little drama — even though there had been drama in the wider world that the markets could have cared about, but didn’t.

We submitted in evidence the remarkably low levels of the VIX: the CBOE index that measures market volatility (and is therefore an indicator of investor fear / confidence or, to put it another way, enthusiasm vs complacency). But then something happened that definitely grabbed Wall Street’s attention — The US Justice Department appointed a Special Investigator to take a look at just what Russia may have been up to with the 2016 US elections and what, if any, connections were there to upper level people in the Trump campaign.

Holy Moley! The Dow shed about 370 points and mid-session the VIX spiked upward by a very exciting 46 percent! The last time we saw such behavior I think was back in June 2016 when Britain voted to leave the European Union. Need we remind you that investors (and especially traders) are not fond of uncertainty?

A good recipe for curing pangs of uncertainty is to search for some data points that represent, if not certainty per se, something close to it. Fortunately, there are some useful ones readily at hand.

The latest economic data show that for the latest week initial jobless claims fell by 4000 to 232,000. That’s good. Even better is that the number is the lowest it has been since 1988. To top that, the average number of people receiving unemployment benefits has fallen to the lowest level since 1974.

So, as volatility returned to its cage, all three of the major US markets were green again today.

Granted, the moves upward on Thursday were not enough to fully compensate for Wednesday’s dip but I think Karyn Cavanaugh has the right view. Karyn is senior market strategist at Voya Financial and in an interview Wednesday she said “Investors wanted a pullback and they got one. We’re still looking forward to pro-growth policies and no matter who is in the White House, we’re still looking for pro-growth policies.”

Us too.


Market Minute 5/19/2017 – Spring Break

 (There is no Market Minute today owing to the fact that Ron, Pat and a few family members are having breakfast this morning on the veranda of a lovely beach house in Belize. Meanwhile we elves are dutifully minding the store here at DSWP and are here if you need us.)


Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051

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