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Good Morning!
Despite the rather mild drop in the Dow Jones Industrial Average, the broader indices as represented by the DJ Wilshire 5000 and the S&P 500 both fell more than 1.35% as those industries that have led on the way up (Basic Materials, Energy and Agricultural) took the brunt of the hit. That said, after such a run-up a correction is warranted and indeed, welcome. We expect this correction to be brief and shallow before stocks once again resume their advance.
On the fixed income side, corporate bonds continue to show strength. We expect this to continue and for U.S. Treasuries to weaken. We also like international bond funds as we expect the dollar to weaken relative to our trading partners.
Dennis Fagan
Chris Fagan