Despite the early arrival of Summer (we had to turn on the air conditioning before Memorial Day!), the stock markets simmered but failed to generate much heat.

With the lack of Wall Street drama, the markets continued to head in one direction: up. U.S. stocks ended June and the second quarter higher and the Standard & Poor’s 500 recorded the fifth consecutive month of gains and the biggest second quarter gain since 2009.

For the first half of 2014, the S&P 500 rose 6.1%. The good news is that a positive first half historically favors a positive full year result.

The first half of the year was filled with surprises that few could have foreseen – and yet the markets seemed not to notice. All the reasons that would have been expected to cause volatility up to this point (continuing turmoil in Ukraine and new conflict in Iraq) have had little to no impact.

The U.S. economy is improving but is still below trend-line growth and the global economic recovery also remains on track.

So can we continue to expect this relatively smooth sailing to higher highs in the stock market? Prudent analysis suggests “no.” We expect we’ll see some upward pressure on volatility which will translate into wider market moves than we have seen so far this year. The S&P 500 has not moved more than 1% in a single day since April 16th. The law of averages suggests a single or multiple headline events will spur market movement. It will keep working its way up until we start to get enough bad news from the rest of the world. So don’t be surprised to see the market pullback. This is nothing to be overly concerned about as […]