We remain fully invested in growth stocks with strong fundamentals and constructive chart patterns, positioning us well to perform in the current environment. Investor sentiment appears optimistic, with high-yield (junk) bonds reaching record highs, suggesting a healthy risk appetite.
Given that backdrop, we believe the uptrends in the S&P 500 and NASDAQ are likely to continue, potentially surpassing their all-time highs, which are now just about 3% away. While media headlines may suggest uncertainty, price action tells a different story. The market reflects all known information, and the price is always right.
Geopolitical developments continue to unfold. Recently, President Trump acted against Iran’s nuclear capabilities by targeting bomb-making facilities. Iran did not retaliate, and while futures markets initially reacted—index futures were slightly down, and oil was slightly up—we wouldn’t be surprised to see equities rebound and oil retreat by Monday’s close.
Although the Fed held rates steady this week, we anticipate a possible rate cut in July. Lower interest rates could catalyze a breakout above the current resistance level. Conversely, if tensions escalate and Iran blocks the Strait of Hormuz, rising oil prices could pose global economic risks. However, given Iran’s dependence on oil exports, we anticipate that diplomacy will prevail. The administration’s “peace through strength” approach could usher in stability not seen in decades.
Gold is in a strong uptrend, within 2% of its all-time high, and continues to serve as a hedge during times of uncertainty. Meanwhile, Bitcoin is in a short-term downtrend. Currently, it is about 7% off its high, behaving more like a risk asset than a haven.
This environment favors active management and selective stock picking. We believe nimble, fundamentals-driven investors can outperform the broader indexes. Grace and peace to all.
Watch List: ALAB, APH, AVGO, AXON, CLS, CRS, CTAS, CVLT, CYBR, DAVE, EHC, ESLT, EXE, GEV, KD, KLAC, MIR, MTZ, NFG, NWG, PGY, PLTR, PWR, ROAD, RRC, UTI, VG, VRT, WPM.
Whatever you do, do it all for the glory of God. 1 Corinthians 10:31