Wage growth is steady month on month and unemployment remains near its 18 year low.”

“The labour market remains fairly tight but risks to the economy are still present.

“While the possibility of a trade war is still top of mind for investors, it isn’t the only cause for concern. Investors are also closely watching the rising value of the US dollar, slowing global economic growth and the risk of the US Federal Reserve tightening short-term interest rates too quickly and dampening domestic economic growth.

However for now, the Fed has reiterated it has no plans to derail growth at this time.

Additionally, US companies have maintained strong balance sheets and tax reform has made it attractive to repatriate even more of their cash from foreign countries.

That money can support business investment, expansion and stock buybacks.

“The second-quarter earnings season will continue to provide a clearer look at both the health of the economy and the potential damage from trade jitters.

Investors should be watching for more cautious tones or any scaling back of capital spending plans and, as always, remain disciplined and diversified.”

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In addition, recent US economic data has demonstrated the US economy is strong enough to keep downward pressure on the unemployment rate—and upward pressure on the trend in short-term interest rates.

“May’s employment report defied expectations, marking the 92nd straight month of payrolls growth and longest stretch in the history of the data. With the report citing much in it for the economic bulls to cheer, inflation remains tame. There remains the risk that the Fed could end up behind the curve and having to tighten more quickly if inflation accelerates more sharply.

“It is worth noting that despite the latest wage growth figures being relatively strong, they are yet to trigger an inflation scare. This is in part because a growing percentage of new jobs being created are in lower-wage industries, and in turn because some businesses are struggling to find skilled, qualified workers for some jobs.

“Markets have been turbulent this year, and additional rate hikes could add to the volatility in the stock market. However, we believe the US economy is in good shape and able to withstand any brewing storms. We don’t anticipate bouts of volatility to diminish Fed tightening expectations in 2018. As always, it is important for investors to stay disciplined, patient and focused on their individual investment goals.

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