The S&P 500 crossed 2,000 for the first time in its history on Monday, before closing slightly off the record level (read our interview in The Financial Times here). Abating geopolitical fears were the principal factors causing investors to push major indexes to new highs, as M&A activity continues and overall economic data was in line with expectations. All 10 sectors of the S&P were higher, with Financials outperforming and Consumer Discretionary shares lagging slightly. Commodities were mixed and bond fell slightly on the easing of concerns.
Home Prices, Consumer Confidence, Durable Goods orders and Manufacturing data are among the key economic reports being released Tuesday morning. However, they could all be trumped by a scheduled meeting between Russian President V. Putin and his Ukrainian counterpart P. Poroshenko – as the world watches and hopes for an easing of tensions between the two neighbors (for more market moving events, read our weekly column in WSJ MarketWatch).
A little further South-West, tensions in Iraq and Syria couldn’t be higher as the United States mulls more military action, including within Syria, to counter the rising Islamic State (formerly known as ISIS). While we generally feel that these types of geopolitical events tend to be transitory and only impact market sentiment for a short-while, we view the current situation as a bit more critical and encourage investors to remain disciplined in their investment approach. Large-cap high-quality dividend paying stocks continue to be our favored investment strategy. Although these (High-Quality Dividend Paying Stocks) are likely to lag in the event of a sharp rally, we take comfort in their steadiness and relatively lower volatility in the event of a correction.
Make sure to tune into CNBC this Friday at 3:45 PM when our Co-Portfolio Manager, Oliver Pursche, joins the CNBC team on the floor of the New York Stock Exchange to provide our latest outlook and market commentary. And don’t miss Money Matters with Gary Goldberg this Saturday at 2 PM and Sunday at 11 AM on WOR 710 AM radio for our complete economic analysis and full market commentary. Visit www.ggfs.com for details.