Much of the recent market decline has been due to worries that the U.S. and China have been intensifying the trade confrontation, rather than trying to come to a deal. With the recent announcement by President Trump that he intends to impose tariffs on all imports from Mexico, trade risks have risen even further and markets have continued to drop. So, what could this latest round of tariffs mean for investors and for the markets?

Yesterday, we talked about why it might be 1998—or 1999—all over again. After all, many of the conditions are similar. Although growth continues for now and we may get a lifeline, you might be concerned that the economy could be settling into a recession in the next couple of quarters. Our most recent experience of a recession and market decline, 2008–2009, has left horrific memories. So, should we be panicking? In a word, no.

Recently, I've fielded a few calls from advisors asking for my thoughts on media coverage declaring that current market conditions are similar to those of the late 1990s. Their clients are worried about what might happen. Could we see a replay of 2000?

Brad here. Starting this week, our Monday Update posts will be brought to you by Sam Millette, fixed income analyst on Commonwealth's Investment Management and Research team. Take it away, Sam. 

As we head into the Memorial Day weekend, I would like to take a moment to honor members of the U.S. military for their service and their sacrifice.

“In Flanders fields the poppies blow /
 Between the crosses, row on row . . .”
— John McCrae

Yesterday, we started Wonderful Wednesday with the benefits of share buybacks. But Eeyore has not left the building. Today, we debut Threatening Thursday. Just as Wednesday will be the day to highlight good news that often goes unreported, Thursday will be about pending threats that are not on the radar—but should be.

I am starting a new feature on the blog: Wonderful Wednesday! Much of the commentary we see in the press—and certainly here—tends to focus on things that can go wrong and things we should worry about. You rarely see a story stating that everything is great.

About a month ago, I started a series of posts on my current personal project: beating the market. As noted then, I am quite humble about what I expect from this endeavor. On the whole, I would like to use it as a way to learn more about the market itself, forcing myself to think through various issues in a very difficult context. But then again, you never know. We might really figure something out. We shall see.

Last week’s data was wide ranging, with an unusual mix of strong and weak results. This is a moderately busy week for economic reports, with a focus on the housing market, news from the Fed, and trends in business investment.

I just returned from spending the past week in Monaco on a Commonwealth conference trip. It was a stellar experience, per usual—our conference planners are the best of the best. Also per usual, getting out of my comfortable home environment has prompted a new level of reflection in me. In this case, I’ve been musing over affluence, income distribution, and what it means to be wealthy.

Thus far, it has been an eventful year. Markets were up substantially, pulled back sharply, and then bounced again. The economy was slow going into the year, picked up during the first quarter, and now may be slowing again. The political story has included the Mueller report, a China trade deal and then trade war, and Brexit (now postponed). Like I said, it has been an eventful year—and it is only May.

Yesterday, we talked about the effects of the tariffs on the stock market and why those effects—even though they are real—are likely to be limited. Today, I want to discuss what actually happened with the tariffs, what they mean for the economy, and where this situation is likely to go. The conclusions from yesterday on the stock market remain the same, but this discussion will provide valuable context for what might happen in the future. So, let’s start with what happened.

After yesterday’s terrible performance—with U.S. stock markets down more than 2 percent—worries are starting to rise. Combined with last week’s declines, it looks like we may be seeing the end of the bull market. So, is it time to panic?

Last week’s data was focused on prices, although we also got an update on the trade balance. This week is a busy one, including looks at retail sales, consumer confidence, and the housing sector.

It’s time for our monthly look at market risk factors. Just as with the economy, there are several key factors that matter for the market in determining both the risk level and the immediacy of the risk. Although stocks have largely recovered from their recent pullback, given valuations and recent market behavior, it is useful to keep an eye on these factors.

After a difficult quarter, April’s data showed signs of meaningful improvement. Job growth bounced back, easing a major concern. Plus, consumer confidence improved, which should help growth going forward. On the other hand, business confidence dipped further, and the yield curve remains close to a risk level.

When we see sharp drawdowns in the stock market like we have over the past couple of days, it’s natural to worry it might be the start of something much worse. Indeed, it could be. Odds are, however, that this will be a brief pullback followed by a rebound.

April was the month that everything turned around . . . we hope. Job growth kicked back to very high levels, taking the unemployment rate to a 50-year low. Consumer confidence rebounded in a big way. And, perhaps as a consequence, retail spending also came in well above expectations. On top of all that good news, economic growth came in well above expectations for the first quarter—even as the Fed stepped back from its hawkish stance, leaving interest rates unchanged and likely to remain that way.

Last week was a very busy one for economic data, with a number of key reports. This week’s data is focused around prices, but there will also be an update on the trade balance.

On the face of it, this morning’s strong jobs number should elicit a full three cheers. Job growth came in at 263,000. This result was up from last month’s downwardly revised 189,000 and well above the expected 190,000. Looks like a home run, right? In fact, when you dig into the details, the news (while still good) is not nearly as good as the headline suggests. That is why I am subtracting a full cheer from the headline.

April was another great month for the financial markets, as U.S., emerging, and developed markets were all in the green. Although there were concerns about a slowdown at the end of last month, first-quarter economic growth actually came in well above expectations. Plus, consumer spending picked up, consumer confidence bounced back, and business investment came in stronger than expected.

Today we will take a look at an old investing adage: “sell in May and go away.” It is supposed to reflect the idea that market returns over the summer and fall are worse than those in the winter and spring. Under this theory, you should sell all your stocks in May and then buy them back in November.