The market continues to meander today as it digest gains and looks ahead to what should be a very eventful week. 

Meanwhile, good news on the housing front as existing home sales came in better than expected.  The 5.71 million annual rate, up 4.4% from year ago, lifting to highest level since February 2007.  

Highlights:

• Median Price $236,400 +6.8%
• Inventories 1.83 million from 1.96 million
• Days on Market 34 from 47
• On Market less the Month 47%
• First Time Buyers 32% from 30%

Rally in Neutral Mode

The reason strong housing data is not helping the market is the twice clouds of uncertainty that have moved in over the horizon.

The White House is getting back in the batter’s box on healthcare reform, while also pushing for massive tax reform, is creating angst.  I continue to believe we will see lower corporate taxes initially, then infrastructure, then other more complicated parts of the Agenda. 

I’m not sure on Obamacare reform (notice I didn’t use the words “repeal and replace”), which must be done.  With the added pressure, the resulting plan, and consequences, fall squarely on the shoulders of Republicans.

Then, there’s the French elections and promise of potential turmoil.  Just think one candidate wants to rip up Frances constitution, collapse of the Euro, to quit the IMF, World Bank and NATO, in addition to major changes to the European Union; and, it’s not Le Pen.

Wildly Exaggerated Fears?

Of course, the latest terrorist action should give Le Pen a boost and propel her into the runoff with one of the other three candidates.  The nightmare scenario for the market would be Le Pen and Mélenchon (the communist candidate I described above) to make it to the final round.  Still, we have seen the adverse knee- jerk reactions from the British exit vote, and the election of Donald Trump, were short-lived.

Near term anything could happen, but long term investors need to look further down the road.