Latest posts by Darrell Cronk, CFA (see all)

    This blog post originally ran as a State of the Markets commentary by Darrell Cronk, CFA, President, Wells Fargo Investment Institute and Chief Investment Officer, Wealth and Investment Management.

     

    Even by August standards, when market liquidity declines and volatility often rises, this month is delivering a larger than normal amount of unusual events. The escalation of the U.S.-China trade conflict on August 1 and subsequent delay of newly proposed tariffs on August 13; the U.S. Treasury’s labeling of China as a currency manipulator, the first use of that designation in 25 years; and unrest and protests in Hong Kong shutting down major transportation arteries—coupled with already slow global growth—all have markets concerned about the path forward.

    This blog post originally ran as a State of the Markets commentary by Darrell Cronk, CFA, President, Wells Fargo Investment Institute and Chief Investment Officer, Wealth and Investment Management

    2019 begins with markets fixated on a myriad of key risks for this year. Through the holidays, I was asked many times: What would reinstate confidence and put the markets back on a steady path forward to continue this expansion cycle? I would propose five New Year’s resolutions that could certainly help.

    The State of the Markets

    The famous investor Sir John Templeton once said, “Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria,” a quote that links the market to cycles of human emotion. The questions I get all the time are, “Where are we in this bull market?” and “What should I do now?” Well, I would say we are in the place of optimism with some euphoria sprinkled in. Does that mean we are getting closer to the death of this bull? I don’t think so — even when the market drops several hundred points as it did this week in Tuesday’s trading session. But let’s review exactly what all the key variables look like right now.