Finally, coming into this year, we stated, “Following last year’s unprecedented streak without any meaningful corrections and the lack of volatility, we expect to see an upturn in volatility and a return of more normal market corrections. Since we don’t see a recession on the horizon, any correction should be shorter and shallower and set the market up for additional gains.” The fundamental backdrop remains solid with the synchronized global economic expansion intact, the Conference Board’s Leading Indicators Index at a new high, and jobless claims at their lowest levels since 1969! The correction in stocks has caused investor sentiment to sour to the point of pessimistic extremes and on the valuation front, the S&P 500 forward P/E ratio sits at 15.9, a level not seen since the Brexit event in 2016.

Related: As Trade Tensions Linger, China ETFs Remain Hot

Given our expectation that a full blown trade war will be avoided and solid economic and earnings growth and attractive valuations and sentiment levels, we continue to believe the recent volatility is a trading correction within an ongoing bull market.

K. Sean Clark is the Chief Investment Officer at Clark Capital Management, which is a participant in the ETF Strategist Channel

Disclosures

1. BlackRock. Available at www.blackrockblog.com/2018/04/03/us-china-trade-tensions/Past performance is not indicative of future results. The opinions expressed are those of the Clark Capital Management Group Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. There is no guarantee of the future performance of any Clark Capital investment portfolio. Material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing herein should be construed as a solicitation, recommendation or an offer to buy, sell or hold any securities, other investments or to adopt any investment strategy or strategies. For educational use only. This information is not intended to serve as investment advice. This material is not intended to be relied upon as a forecast or research. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Clark Capital Management Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Clark Capital’s advisory services can be found in its Form ADV which is available upon request.

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