Equity investors overlooked President Trump\u2019s withdrawal from the Iran nuclear accord and pushed stocks higher. Energy prices rose with increased tensions, with Brent crude oil prices hitting $77 a barrel. A subdued inflation reading Thursday added confidence that the Fed won\u2019t accelerate interest rate hikes. \r\n\r\nWeekly Returns\r\nS&P 500: 2,728 (+2.4%)\t\r\nFTSE All-World ex-US (VEU): (+1.3%)\t\r\nUS 10 Year Treasury Yield: 2.97% (+0.02%)\r\nGold: $1,319 (+0.3%)\t\r\nEUR\/USD: $1.194 (-0.2 %)\r\n\r\nMajor Events\t\r\nMonday \u2013 Starbucks sold rights to sell its coffee and tea in grocery and retail stores to Nestle for $7 billion. \r\nTuesday \u2013 President Trump announced that the United States will withdraw from the Iran nuclear accord. Saudi Arabia and Israel applauded the move but it was rejected by Britain, France and Germany. U.S. oil prices passed $70 per barrel. \r\nTuesday \u2013 Takeda Pharmaceutical agreed to buy Shire for $62 billion. \r\nTuesday \u2013 Japan\u2019s Recruit Holdings agreed to buy Glassdoor for $1.2 billion. \r\nThursday \u2013 Goldman Sachs and Apple announced they would launch a joint credit card with the Apple Pay brand. \r\nFriday \u2013 President Trump said he would reign in drug prices, but stopped short of endorsing more radical ideas such as allowing importation of lower cost drugs and letting Medicare negotiate directly. Health Care stocks rose.\r\n\r\nOur Take\r\nIn last week\u2019s policy statement, the Fed appeared to strive to make very few changes to its previous outlook. That, coupled with this week\u2019s subdued inflation report, suggests the most likely path forward is for two additional rate hikes this year, not three. \r\n\r\nSo far this year, stocks are up a little and bonds are down a little. Of course no one buys bonds to lose money, but recent developments should be encouraging to owners of bonds. Rates are higher than they were in the beginning of the year and that makes bonds more attractive on a forward-looking basis. Equity volatility has retreated after spiking in February and March, but it feels unlikely it will go into complete hibernation as it did in 2017. The right long term mix of stocks and bonds remains the most important decision most investors make and we recommend not losing faith in bonds because of low single digit losses over a few month period. \r\n\r\nOil just shot past $70, something many people thought would never happen again -- few predicted the fall from $140 to $30 and few predicted the current rebound. This illustrates how hard (and usually counterproductive) it can be to bet on commodity prices. We don\u2019t have an official forecast, but we note that many shale and other producers are profitable at about $50-$60. This means little in the short term when geopolitics are taking center stage, but taking a longer term view may mean prices should fluctuate somewhere modestly north of this range. \r\n\r\nTo learn more, contact a financial advisor.\r\n\r\nInvest with Us & Get 2 Months of Free Advisory Service or an iPad*\r\n\r\n\r\n\r\n*See full terms and conditions.