My outlook for the coming quarter is very similar to that of last quarter.  I don't foresee major market drivers.  But that sentiment is not strong.  Here in the U.S. we have elections in November that could push a market reaction.

If I am right about Russia losing face in Ukraine, Putin could escalate tensions if he fears losing too much global credibility.  Russia absolutely will not give in on having land access to Crimea and some form of geographic buffer on its western border.  Though the current cease-fire is weak, I believe the elements are in place to prevent further trouble.  In the Middle East, if the Muslim community fails to make progress against IS, that could be destabilizing.  The air campaign is in place to allow time for the major regional Muslim countries to pull together and fight IS on the ground.  With the ever-present Sunni and Shia split, coupled with tribal conflicts, it won't be easy.  The U.S. fears IS could take over a more well-equipped military such as in Syria or Iraq.  That would provide them powerful assets and capabilities they don't currently have.  Countries such as Saudi Arabia, Turkey and Iran should be equally concerned.

My prediction last quarter that the European Central Bank (ECB) would adopt a policy similar to U.S. Quantitative Easing has played out.  This has already weakened the Euro currency and should provide support for economic improvement.  My equity strategy is to remain fully invested with an underweight to small caps and the U.S. and an overweight to both International and Emerging markets.  For fixed income, I will add to strategic bonds and continue my overweight in alternative investments.