The developments out of the Middle East have helped the risk-reward equation, but it it is still weighted towards the side of risk.  The fact that the stock market is still expensive at a time where growth is slowing and earnings estimates are falling, the "Fear of Missing Out" should not be very high right now.

Given how expensive the stock market has become once again...and now with geopolitical risks rising...the upside potential is only about 3%-5%.  However, the downside risks are 10%-20%.  So, investors should not be complacent at current levels.

In this week's podcast, we talk about why the stock market could easily see a new all-time high, but there are still some significant risks for the longer-term.  Remember, spring "scares" are frequently followed by bigger problems in the fall.....Also, silver is seeing a strong breakout and this is likely signaling a very strong rally-leg for this precious metal.

The upside potential for the stock market is a new all-time high, but that still keeps the upside at about 5%-6%.  However, the downside risks are for a 10%-20% decline...even if we avoid a recession...given that the economy is definitely slowing and earnings estimates continue to decline.  

The momentum in the stock market is strong, so it could make a new all-time high.  However, investors seem to be equating the fact that we're not going to get the worst-case scenario on the tariff issue...with the thought that the economy is going to see the best-case scenario.....Instead, the upside potential is smaller than the downside risk after the recent strong bounce off the April lows.

The agreement between the US and China on tariffs does lower the odds of recession.  However, there are still other reasons to be concerns about today's very expensive market.  That said, we do have some good picks in some names that should do well no matter which way the broad stock market goes over the coming weeks and months.

The reaction to the foundation for a trade agreement between the US and China is certainly positive.  However, there are still several very important headwinds from outside the tariff issue that remain intact...including higher long-term interest rates.  Given that the stock market has become extremely expensive again, this could/should mean that we'll still see plenty of volatility in the weeks and months ahead.

The fundamental outlook for the stock market is not strong enough to justify a further rally from current levels.  That said, the major averages are all testing key technical levels, so the negotiations with China this weekend should be very important for the stock market's next big move.

Even after we get more clarity, tariffs are going to be meaningfully higher.  That's going to create more headwinds for an economy that was already slowing, and for a stock market that is still expensive.  Therefore, investors should continue to use rallies to raise cash and get more defensive.  

The economy is weakening and earnings are falling.  This is not good a tall for a stock market that is still very expensive.....The stock market cannot trade at 20x forward earnings (or even close to that) without major liquidity injections...and the Fed is signaling that they won't be providing those injections.