One week before Brexit, on Thursday June 16th the S&P 500 closed at 2077. Today, one week after the Brexit vote the S&P 500 closed at 2098. Now, if you happened to tune into business media stations (or even regular news stations and talk shows for that matter) you might have been led to believe by market gurus that the end of civilization as we know was upon us. You heard about the TRILLIONS of dollars lost in individuals retirement accounts, and these same gurus were pontificating that now was the time to take defensive action. As always, I have no idea where the market will be a week, a month or a year from now, but I am pretty sure that these credentialed pundits don’t either. I know, the only way these gurus and the stations that they appear on can get your attention is through sensationalism, but I do feel bad for anyone who might have sold on Monday only to see stocks recover right back to where we were before the vote. Of course, the Brexit situation is important in terms of the global stage, and yes it can affect share prices now or in the future, but as we pointed out a few days ago, no one knows exactly how this will all play out and beware of those who claim that they do. And, by the way, to panic out of your retirement investments because of it – well that’s just crazy.
As for today, the last day of the second quarter, by the close the Dow Jones Industrial Average was up 235 points to finish the day at 17,929. The aforementioned S&P 500 was up 28 points to close at 2098. Gold was down $2 to trade at $1,324 per ounce, while oil was down $1.38 to trade at $48.50 per barrel WTI.
On the economic front the Chicago PMI surged in June. I’m not suggesting that a couple of recent strong economic reports will persuade the Fed to get back on the rate raising path, but you’ll never hear any good news if we don’t bring it to your attention.
Anyway, the first half of the year ends with stocks slightly higher, despite the awful start to the year and the recent Brexit scare. We head into the second half of the year with plenty of challenges ahead. Corporate earnings have been squishy, global growth is virtually non-existent, and we have zero or negative interest rates around the globe. We don’t need gurus to identify the issues that investors will be dealing with in the second half of 2016. Simply put, business news networks and market gurus can be dangerous to your investing health. Viewer beware!
Have a nice evening everyone.