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In my note last week I wrote that the S&P 500 and the Nasdaq indices had both reached record highs with the Dow Jones Industrial Average close behind.  As I write this note today all three of the indices are selling at record highs. So where do the markets go from here?

I think that the stock markets in the U.S. will continue to rise, although not as quickly as they have over the past few months.  The political and economic uncertainties surrounding Great Britain’s vote to pull out of the European Union (Brexit) seem to have diminished in the eyes of investors.  With the second quarter corporate earnings season in the U.S. mainly over, attention will now turn towards earnings for the remainder of the year.  These corporate earnings are expected to be higher in the second half of the year than they were in the first half of the year.  This is positive for the stock markets.  And as the year progresses uncertainty over the U.S. Presidential election will go away as we choose a new president.  Finally, we will also get greater clarity on the U.S. Federal Reserve’s decision to raise interest rates.  I still think that the Fed will wait until December to raise interest rates.  All of the above are reasons I am optimistic that the U.S. stock markets will be higher by year-end, even though they are currently selling at record highs.