Volatility increased slightly last week, jumping from 9.90 to 15.50. Geo-political tensions were to blame for the rise… or were they?

Geo-political tensions between the US and North Korea rose to a fever pitch over the last week. A war of words ensued and the markets appeared to falter as things became more heated. By weeks end, the S&P 500 shed nearly 1.5%.

In addition to all the blustering between the US and North Korea, last week was a major week for retail earnings reports. Retail has suffered as of late and last week was no different. XLY, the ETF that tracks consumer discretionary stocks, fell 1.5% as well last week.

While the two are worlds apart in how serious they are, they are not mutually exclusive in their effect on the market. While the risks from geo-political tensions are real, they are an unknown. Corporate earnings are a known and directly impacted the market.

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