Liz Ann Sonders, chief investment strategist with Schwab, believes the bull market will continue. She points to:
- The lack of new net inflows into equity mutual funds (unprecedented in a bull market like the current one);
- The S&P has crossed its 50-day moving average more than 50 times so far this year (much higher than earlier in the bull market);
- Stock buybacks may be supporting rises in stock prices;
- The Fed is signaling a slow tightening of interest rates, which historical data suggests produces higher returns than a fast tightening;
- The economy has added 13.5 million jobs since the financial crisis.
Purported contrary trends, such as a potential profits recession, may be explained in ways that do not contradict a bull market, Sonders suggests. Declining profits, she says, are mostly concentrated in the energy sector.