This week, US equities markets put in a positive performance with the S & P 500 (SPY) +.69% for the week and closing at all-time highs but still lagging Eurozone equities by a whopping 5%. Eurozone equities soared, anticipating a happy re-euro-in with most polls showing Macron widening his lead after a nasty debate with Le-Pen.

Even though US equites finished near or on all-time highs (except for the Russell 2000), volatility popped a little Friday, with some traders taking out an insurance policy should Le Pen win in an upset.

The new Trump administration took a victory lap around Capitol Hill after the House passed the bill to repeal the Affordable Care Act. This victory is but a skirmish, as winning in the Senate wins the war. If the markets are any indication that repealing the ACA will pass the Senate, the health care sector (XLV) failed to notice. It shrugged off the vote and barely budged, clearly not able to make heads or tails out of things.

Trump also met with the Australian Prime Minister this week and praised their health care system. The irony is that Australia has a public healthcare option for all citizens, called Medicare, and its system is far more aligned with what our House just voted to end.

Trump should have taken an additional victory lap for putting pressure on China to subdue little Kim of North Korea. The pressure from Trump seems to have precipitated a rare bout of public discord between North Korea and China.

Another unexpected development is the presidential election in South Korea on May 9, the expected liberal-leaning winner looking to reset relations with its northern relatives and the US.

Kim, looking to counter the pressure with China, just might jump at the chance for improved relations and some cash.He might look like Dr. Evil, but will he look a gift horse in the mouth and miss a chance to hang out with long lost relatives? Maybe peace break outs.

These geo-political wild cards are all around us, and some conflicts might end on a positive note, ultimately supplying enough euphoria usually associated with a mega super cycle blow off.

One could partly attribute the plunge in Gold this week to the reduced chances of North Korea acting recklessly without support from its neighbor. Slowing inflation, including imploding oil prices, supported lower gold as well. Corn and soft commodities look different and even bullish.

As global equites with very few exceptions roar, the big sell-off many value players anticipate does not seem imminent. Market sectors that initially rose right after election are now languishing, but it’s not showing up in the broad indexes.

Just follow the facts and don’t listen to the talking heads. You don’t need a PhD in economics to know when things are heading south in a big way. Since all major bear markets occur during recessions and economic contraction, it’s smart to pay attention to two economic indicators. Follow unemployment data and the Conference Board LEI Index (Leading Economic Index) very closely. The Conference Board is considered an unbiased, trusted source of economic data and the LEI index leads contractions by 10 months on average.

On a positive note, the unemployment data dropped to 4.4%, which showed improvement versus its yearly average. Historical lows date back to the Johnson era at 4.2%. LEI numbers are also very strong and the chances of a recession are minimal.

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