Weeks of worry—about trade, growth, and Europe—knocked markets down. But today we have the reversal. Mario Draghi, the head of the European Central Bank (ECB), has once again come out in favor of looser monetary policy and lower rates, which cheered markets globally. And this morning, President Trump tweeted that he would be meeting with China’s leader, which further cheered markets. As I write this, the S&P 500 is up by 1 percent and well over 2,900. This level takes us to within 1 percent of a new all-time high.

One of the most reliable signals of a pending recession is when, in the jargon, the yield curve inverts. This sounds like a fancy phrase, but it simply means that investors demand to be paid more for a short-term loan than for a long-term one.

This has been a busy week of catching up after attending another round of excellent Commonwealth conferences. So, today I have just a few quick takes on some wide-ranging topics.

I do a semiannual update of my economic and market outlook every year, usually in several versions over a one- to two-month period. In the past couple of years, that strategy has worked. Fundamental conditions didn't change much over that period, even though headlines often did.

“Sell in May and go away” was certainly on point last month. With U.S. and global markets down significantly, investors closed out the month with a level of worry we have not seen since the end of 2018. Let’s take a look back at this volatile month, as well as what we might expect going forward.

Yesterday, the tech stocks got hit hard on news that Washington will be taking a much harder look at regulating them. Trade worries continue to reverberate throughout the market. And fears of a more severe slowdown—or even a recession—are building as the yield curve remains inverted. Further, the Nasdaq moved into correction territory yesterday (defined as a decline of more than 10 percent from the peak), although as of this writing, it was showing signs of a strong bounce today. 

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?

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