Economic analysts have “written off” the 1st calendar quarter of 2015 as a disappointing one for the U.S. economy due to: (1) the severe winter in the Northeast and Midwest; plus, (2) the dock strike on the West Coast. As a result, many economic analysts believe “as goes the 2nd Quarter, so goes the year”. Much stock market volatility will result from the 2nd Quarter reports which will be released in May, June, and July. If one of these economic reports appears too “cold” the stock market will respond negatively because it will appear the economy has not bounced back. On the other hand, if the report appears too “hot” the stock market may respond negatively because the FED will probably raise interest rates that much faster (a negative for the stock market). In short, “goldilocks” economic reports will be best received. It’s unlikely each report will be a goldilocks report. Thus, the upcoming 3 months will most likely be a time period of higher volatility. The 3 month period may end with a positive market performance – however, we can expect higher levels of stock market fluctuations.
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May 4, 2015 | Weekly Commentary