Ebbs and flows in trade talks, Italian populism, and the North Korea summit paired with a strong jobs report left stocks modestly higher after a volatile week. With multiple geopolitical issues playing out simultaneously, investors are starting to realize most of them will take quarters or years to play out, not days or weeks. Official U.S. unemployment dropped to 3.8%, the lowest since April 2000. Average wages rose 2.7%, leaving the Fed on track for at least two additional rate hikes this year. The dollar gained for a seventh straight week.\r\n\r\n Weekly Returns\r\nS&P 500: 2,735 (+0.5%)\t\r\nFTSE All-World ex-US (VEU): (-0.3%)\t\r\nUS 10 Year Treasury Yield: 2.90% (-0.03%)\r\nGold: $1,293 (-0.9%)\t\r\nEUR\/USD: $1.166 (+0.1%)\r\n\r\nMajor Events\r\n\r\nTuesday \u2013 Italian bonds plummeted after President Sergio Mattarella decided to block the formation of a euro-skeptic government, reviving concerns about the stability of the Eurozone.\r\nThursday \u2013 Italy reached an agreement for a coalition government after a new economic minister was proposed.\r\nThursday \u2013 Canada and Mexico issued retaliatory tariffs after US levies on steel and aluminum went into effect. The EU also said it was preparing counter-measures.\r\nFriday \u2013 President Trump said the June 12 summit with Kim Jong Un is back on.\r\nFriday \u2013 US payrolls rose by 223,000, dropping official unemployment to 3.8\r\n\r\n\r\n Our Take\r\nAmid all of the geopolitical headlines and President Trump\u2019s frequent position shifting, it can be easy to overlook the fact that companies are producing record profits and the economy is chugging along. This week\u2019s jobs report shows strength and a good middle ground for wage growth. The ten year Treasury yield is back below 3%, easing fears among those who expect rapid interest rate escalation.\r\n\r\nThe official unemployment rate hit 3.8%, the lowest since April, 2000. Of course the dotcom bull market peaked in March of 2000, so that may not provide much comfort, but there is no reason this cycle can\u2019t stay stronger for longer. The magnitude of growth at the end of the 1990\u2019s bull market in terms of both GDP and stock prices was much greater than we\u2019ve seen so far, so the current cycle may be less likely to overheat in the near-term.\r\n\r\nVolatility early in the week was driven by populist gains in Italy and fears the country may try to exit the euro. While we don\u2019t think that is likely in the coming years because it would be too disastrous for Italy, it is a reminder that the common currency remains fragile and maintaining consistent monetary policy across borders has great challenges. Brexit so far has proved less painful than some expected, but because England is not in the euro it is much less complicated. European debt and threats to the euro in general have been the among the very few issues able to drive corrections in this 9-year bull market, and they will continue to impact markets for the foreseeable future. \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.