Stock Surge after trade tensions ease

Did the market overreact last week with the 1,400 point drop caused by trade war fears? Are we making too much of the tough talk from the White House?I think that we are, what is happening is there is headline news that is driving short-term sentiment without a doubt . There are structural issues as it relates to volatility. I listened to many Investment Advisors talk about volatility over the last week. Here is my take, interest rates drive positioning, volatility drives positioning, credit spreads drive positioning and so you have momentum that builds up in one direction or another.The fact is there was a huge amount of macro-issues last week driving volatility that impacted the market.What can take this market higher gain? What I believe is the catalyst going forward is ultimately great corporate earnings. Fundamentals will be the catalyst for the market when April's earnings start being announced. There is also a fundamental catalyst why volatility is picking up this and that is because of interest rate normalization. So lets not make it all about headlines lets make it about interest rate normalization and what is going to drive markets over the short-run is the gradual removal of all these negatives that we have seen from these headline risks. When you one risk go away another new risk takes its place.What is your best strategy currently? You have to keep eye on corporate earnings mainly because the Tax-cuts and earnings acceleration. We get distracted by some of the headline risks and the market is going to be susceptible to headline risk but what is the best strategy for investors. If we can get to place where all of sudden the market is not focused on the leadership of Facebook, Amazon, Netflix, Google, and we pivot our attention to Financials , Energy, and value stocks. I believe that is what everyone is hoping for but right now that is not materializing. We believe that you should stay invested and buy on weakness . The Economic backdrop still has very good fundamentals globally and improving corporate earnings because of the U.S. tax-cuts , but this year will be volatile.We are recommending three sectors at this time for investment -Financials, Yes Tech, and IndustrialsHave Happy Easter everyone!!John C. Verducci 111