Hey Friends. I hope your summer is off to a great start. Here in the deep south, we have recently seen unusual rains and electrical storms but it has all calmed down now and it’s the typical summer weather again (hot and humid with isolated showers once in a while).

While the weather has been unusual lately, the market is more unusual, in my view. Feelings can steer you off course, but this market feels very “weird” to me. The uncertainties of runaway debt levels coupled with inflation where the jury is still out on the Fed’s future course of adjusting interest rates just don’t seem to correlate at all with the confidence shown toward stocks.

Yes, earnings have hung in there for some companies and many believe that Artificial Intelligence is about to revolutionize virtually everything. Even so, our financial foundations seem to be fracturing before our very eyes. The recent bank failures revealed something and it seems we have blown those off as merely outliers and accepted that the FDIC can plug any gaps that might arise.

With interest rates back to ~5 percent, the interest will surely burgeon our massive national debt. We may have come to believe that the debt can always simply be refinanced — that the level of debt isn’t really a problem. I can’t get past seeing a huge Ponzi-type situation (for lack of a better description).

In a nutshell, the market seems to be in a type of denial, just brushing off each and every systemic and macro threat that pops up. To be in the stock market, one has to be an optimist and so the point of this post is not to reflect pessimism. But optimism doesn’t equate a lack of realism either. Uncertainty is a good term for risk. Risk is downside; the potential of loss and plausible magnitude of loss. The Fed is trying to walk a tightrope and our government continues to disregard the debt crisis in that it doesn’t yet show any resolve to dealing with it head-on.

Perhaps part of the explanation behind a relatively strong stock market amid such significant uncertainty is that no one really has a decent feel for “where” to safely put money to work. I’ve expressed an opinion previously that the strength of cryptocurrency is a reflection of the skepticism toward the stability of our current monetary system.

I don’t want to end on a sour note. We may weather this financial uncertainty or we may find difficulty up ahead. As to facing the uncertainty wisely, again, my angle remains the same — carefully analyze the financial health and flexibility to sustain a future by carefully examining the balance sheet before committing money to something. My book “Choose Stocks Wisely” shows how to properly analyze a balance sheet for health and substance.

See you next time.