Treading water

Happy Friday everyone!

You may have noticed that the stock markets have been going sideways for a little while – no dramatic ups or downs of note. This is a very good sign that the markets are beginning to discount facts and not emotions – a good thing. By the way, parenthetically speaking here, the word “discount” is market jargon for “respond to.” So investors are beginning to respond to news, rather than their emotions as they are investing. There has been a decided lack of euphoria and panic. Ultimately, this is how financial markets are supposed to work. They are not mood rings, but vehicles that allow considerate folks to buy and sell interests in businesses efficiently.

Because of the lack of substantive news in the last week and a half there have been no major moves up or down. The second quarter is coming to a close in 18 days and then earnings season will begin anew. There will also be a number of government data coming out soon as well. All of which will allow investors to take a “sounding” of the state of things. As a sneak preview of the second quarter data, it’s my feeling that many businesses are going to announce better than expected results. That will likely result in a “pop” upward in financial markets. The more that people hear positive stock market results the more they will be willing to spend. That, in turn, will result in more upward momentum for the economy. Whatever happens, these last 15 months have been some of the most interesting in my investing career and that is likely to continue for awhile.

Jason