Sonders Remains Optimistic

While some have been concerned about the low volume and lessened volatility in the market of late, Charles Schwab’s Liz Ann Sonders remains upbeat on stocks.

“The grinding-higher [market] action that has resulted is certainly no disappointment,” Sonders says in her latest market commentary, written with Brad Sorensen. “The market has moved through important resistance levels while setting new 52-week highs.” She says a near-term pullback is a possibility given recent increases in sentiment, but she adds that mild corrections are “a healthy part of any cyclical bull market”, and that she is “relatively optimistic on near-term prospects of the market continuing to grind higher.”

Sonders and Sorensen also provide historical data showing that the market can move higher during sustained periods of low volatility.

As for the economy, Sonders says she’s confident that the U.S. will begin to see sustained job gains as soon as the March labor report. “Temporary employment has increased substantially, corporate profitability is on a tear, employment components of various manufacturing surveys have improved, and demand for products and services is increasing — all good leading indicators for job growth,” she and Sorensen write.

Sonders also isn’t as down on the U.S.’s debt situation as many have been. “The ingenuity and entrepreneur attitude of this country has pulled it out of tough times before, and for now we continue to believe that aspect has been overlooked as a way of growing out of the deficit problems,” she says. “In addition, thanks to exceptionally low interest rates, the cost of servicing the nation’s debt remains very manageable … for now.”

Sonders and Sorensen also talk about the global economic picture, as well as interest rates and inflation in the U.S.

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