Earnings Trump Politics

Despite the geopolitical noise, the stock market is at record levels fueled by strong corporate earnings and policy hopes related to tax reform. Overseas we are seeing sustained, above-trend economic output and steady earnings growth. Risks to foreign investments include the ever-present geopolitical factors, as well as changes in currency values as the dollar could strengthen on rising US interest rates and FED actions.

The optimism in the market is something we haven’t really seen in eight-plus years. Markets are the most stable and sustainable when there is a healthy amount of fear and skepticism. Right now, it seems like investors have grown a little too complacent. The economic fundamentals are still strong and warrant a growing market but it may be too much too fast. We expect some sort of a pullback in the coming weeks or months followed by continued economic growth and market expansion.