Good Morning,
Happy Monday! I saw a few people out mowing this weekend. With all the rain we’ve had, it looks like we should be in store for some bright May flowers.
Markets are lower this morning as negotiations with Iran over the weekend ended without a deal, and reports indicate a naval blockade of the Strait of Hormuz may be underway. While details remain fluid, I continue to find it constructive that the S&P 500 is still within ~5% of all-time highs, despite the geopolitical uncertainty that has unfolded over the past four to five weeks.
Oil prices and the risk of stagflation remain front and center. However, as we saw during last week’s market rally, markets can move quickly and continue to be heavily headline-driven. Q1 earnings season begins in earnest this week, which should help provide greater clarity around the strength of the underlying economy.
With the midterm elections approaching and President Trump scheduled to meet with China’s President Xi next month, there is a great deal riding on the coming weeks—particularly as it relates to a potential resolution with Iran. In the meantime, patience remains warranted. I continue to favor a value tilt within portfolios, which has outperformed year-to-date.
As always, please feel free to reach out with any questions or comments.
Attached is this week’s Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management.
Have a great week!