I hope everyone had a great Memorial Day weekend! Buckle up—these next few months always seem to fly by.
Major market indices opened at or near all-time highs as the very fluid situation with Iran continues to unfold. U.S. forces conducted “self-defense” strikes in southern Iran early Tuesday, as a potential deal appears to be making progress. The market remains highly headline-driven, but investors seem to be pricing in a resolution sooner rather than later.
Given the strong earnings backdrop, continued enthusiasm around AI, and upcoming IPO momentum (think SpaceX), I believe the market still has room to move meaningfully higher—particularly if a deal is reached to reopen the Strait.
This week, I’ll be watching April’s PCE (the Fed’s preferred inflation gauge) and the unemployment report, both scheduled for Thursday. We are also seeing the beginning of Kevin Warsh’s tenure leading the Fed. Interest rate expectations have shifted from anticipated cuts to potential hikes; however, I believe a status quo approach is most likely in the near term. Value stocks have outperformed growth so far this year, which I view as a bullish sign of broader participation across the market.
Please feel free to reach out with any additional 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 rest of the week!