Q1 2018 is in the books, what’s next?

And, yes of course, more volatility.

Whether market valuations are extended or justified is debatable and a regular topic of discussion in the financial media. Pundits in the fixed income market have for too long predicted a calamity, but with little success. The world growth story remains viable, and barring an escalation in retaliatory trade policies, corporate profits should continue to grow but could have trouble as year-over-year comparisons become more difficult.

As Mohamed El-Erian states in a recent FT article:

“The world economy has benefited from the happy coincidence of four drivers of higher growth: a natural healing process in Europe; rebounds from shock-induced slowdowns in Brazil (caused by political uncertainty), India (de-monetization) and Russia (commodities); China’s soft landing; and pro-growth policies in the US.”

Consumer confidence remains strong and the numbers coming out of world PMI’s remain strong. But the wall of worry we climb in 2018 will be different from the wall of 2017.

Familiar risks have already begun to show their faces. Illiquidity is front and center. Unwinding of leveraged trades is another. The world economy works because of credit, and when the money stops flowing for whatever reason the economy stops working.

Plan on joining us for a short conference call on Wednesday. We’re planning to announce an exciting new partnership for the Salt Creek Investors platform. Check your email for the invitation and respond today. And as always thank you for your confidence in our efforts.

LaSalle St. Investment Advisors, LLC
940 N. Industrial Dr.
Elmhurst, IL 60126