Market Overview: The Late Stage Bull.
After a disappointing end to 2018, financial markets snapped back during the first half of 2019. The risks that were forecast so heavily by financial media outlets during the fourth quarter of 2018 largely went unrealized, volatility receded, and financial markets strengthened. As both the stock and bond markets posted strong returns at the midpoint of 2019, we must now consider what the second half of the year holds. Although market concerns relating to continued tightening by the Federal Reserve receded, risks around trade negotiations, Brexit, Iran and Venezuela persist. Adding to the body of concerns, valuations increased measurably in both the equity and fixed income markets, while corporate sentiment waned, triggering numerous downward revisions to earnings estimates. As these and other risks rank and reorder through the balance of the year and beyond, risk management will likely take priority.