Where the market is headed, says Wells Capital Management’s chief strategist, is more like a “bunny” market than a bear or bull. In last week’s Barron’s, Jim Paulsen explains that a bunny market, “doesn’t typically suffer a bear market collapse nor does it rise as fast as a bull market. We expect the bunny to dominate the balance of this recovery cycle.”

He shares specific insights about the economy:

• Economic growth: Paulsen sees a global economic recovery and an improved profits cycle as factors that will hold off a recession for many years.
• Synchronization of global policy: Growth around the globe has not only been subpar, Paulsen says, but economic policies have conflicted. “Already,” he says, “signs of a synchronized global economic bounce are materializing and we suspect this will become more obvious as the year progresses.”
• Earnings-per-share: While corporate earnings have been sluggish since peaking in 2014, Paulsen argues, “the earnings cycle seems to have been refreshed and restarted.”
• Stock market perceptions: Investors may “face a fairly volatile ride adjusting to rising yields and higher inflation.”

Paulsen writes, “Essentially, although far less than the bull market returns they have thus far enjoyed, this bunny market could still generate better returns than expected from bonds, cash or certainly from a bear market.”