Stock Market Observations


The S&P 500 and DJIA were up 10-11% on the year through early August—solid, but not quite the “melt-up” scenario we’d envisioned earlier this year. Our late summer S&P 500 target zone of 2,550-2,600 is in sight, and six weeks of summer remain. But that timetable (if not the target zone) now looks too optimistic. We think 2,550-2,600 may yet be achieved, but not until year-end. Conditions have slipped into place for at least a short-term correction, and we’ve therefore trimmed net equity exposure in tactical portfolios to 60%, from 67-68% previously.

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