Month in Review.

In April, the stock market faced challenges, grappling with inflation an uncertain FED, ongoing robust economic data and global uncertainties across the Middle East, the RED SEA and Russian/Ukraine – add in the impending U.S. presidential election and there is a lot on the plate.

Despite all of this – there’s a prevailing sense of both optimism and concern among experts regarding U.S. equities. And while it was a difficult month for stocks – The S&P ended up losing 3% up from a loss of 5.6%, while the Nasdaq (think high tech, growth) lost 2.6% but not before giving up 7.5% as we moved thru the month. The view is that the recent setbacks are temporary, believing it’s merely a pause in the market’s upward trend.

The latest sense is that the optimism outweighs the concern. With big asset managers having a more bullish leaning… Some experts are now predicting that by year-end, the Dow Jones could end the year up 10.5% – which would take that index to 41,200 – but remember – the Dow is only 30 names – yes they are some of the biggest names, but they are only 30 of the more than 4000 companies that are traded publicly. 

The better case is to include the S&P 500, the Nasdaq 100 and the SMID’s (Small and Mid-Caps) …. which are all expected to be up as well.   The bullish forecast calls for the S&P to end the year at 5461, the Nasdaq at 17,100 targets while the Russell has a 2175 target for year end. If this comes true – it translates into an increase of 14%, 13% and 8% respectively.

The bears on the other hand are forecasting the Dow to end the year at 37,300, the S&P to end the year at 4753, 14,650 for the Nasdaq – which means we would have an essentially flat year.

While some voices caution about the market being overvalued, others draw attention to resilient consumer spending and the robustness of the labor market as reasons for optimism. Even though there’s been a slight economic slowdown (not sure I really believe that), experts remain upbeat. They anticipate a remarkable 11% growth in earnings per share for the S&P in 2024.

So, what does this mean for the long-term inventory? It suggests that despite the recent turbulence, you should stay the course, have a well-defined plan, and remain invested.  There is still a strong underlying confidence in the resilience of the economy and the potential for continued growth in the stock market.

But let’s not pretend that there are NOT challenges ahead. There are!

Inflation remains a concern, Treasury funding is a concern – what will Janet bring to market and what will that do to yields? We have now seen the 2 yr. kiss and pierce 5% with the 10 yr. not far behind – and remember – a 5% 10 yr. yield will cause some investors to rethink their portfolio balance.

Expiration of tax policy is a concern, Monetary policy a concern – Is a rate hike back on the table or did Nicky T (WSJ) turn up the heat for no reason? JJ said – it is ‘unlikely’ for a rate hike to be the next move – but he did not say it was OFF the table….

And then there are the ongoing uncertainty surrounding the geopolitical events that now include the out of control ‘campus peaceful protests’ clearly funded and created by official ‘agitators’ – have been  anything BUT peaceful – – they have revealed the ugly underside of those that hate America, they have revealed more about their own racist tendencies and that is raising the flag of concern in the US – concern for our country, concerns for our citizens, concerns for our diversity and concerns for a whole generation of Americans that appear to be clueless.  

Add in the upcoming U.S. presidential election and that only adds another layer of complexity, unpredictability and distress. Leaving me once again to ask – Is this the BEST we’ve got?  Really?

However, amidst these challenges, there are opportunities for investors…… The market has shown remarkable resilience in the face of all of this adversity, and it is this resilience that will drive growth.

As we navigate through these uncertain times, let’s remember the lessons of the past. History has shown us that markets are cyclical, and while there may be bumps along the way, the long-term trajectory tends to be upward.

In conclusion, while the road ahead may be bumpy, there’s reason for optimism. By staying informed, remaining agile, and focusing on the long-term, we can weather the storms and emerge stronger on the other side.

Call me to discuss – happy to join you in the conversation.  212-381-6194

Take good care.

kpolcari@slatestone.com

Sources:  Bloomberg, CNBC, Reuters, Wall Street Journal

Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment.  The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.

The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.

While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.

Kenny Polcari is the Chief Market Strategist for SlateStone Wealth.  Neither Kenny nor the partners of SlateStone Wealth are compensated in any manner by the issuers of any securities mentioned in the publication.

Potato/Broccoli Surprise

Now you gotta try this….

You need – 12 Fresh broccoli (crowns), 1 large baking potato (peeled and cubed).  s&p, Olive Oil, flour, shredded mozz,

Boil the potatoes, 10 mins before they are done, add the broccoli crowns to the pot. continue boiling until done. Now mash the potatoes and broccoli – using a fork or a crusher– add in 1 c of flour, a bit of olive oil and s&p. Mix until it become pliable.  Now take a handful – roll it out and then flatten on the counter. Add the shredded mozz and then fold it around itself – so that mozz is in inside.

Next heat up some olive oil in a frying pan and fry the ‘croquettes’ until golden.  Remove and let cool and then bite into them.  Surprise!  The mozz should be all nice and melty….