•After a 15% rally since October, the market may be set up to pause don’t panic. After the recent near pause less rally, sentiment indicators have grown overly bullish. This is generally a signal that near term volatility is likely to return, as investors are not focused on risks. This increases the possibility of a negative shock. However, when a dip occurs, it should be viewed as a buying opportunity based on positive corporate and credit fundamentals
• Fundamental and management sentiment data point to accelerating earnings growth, at the same time that credit lending standards are starting to flash signs of tightening.This is a classic set up for the beginning of the late stage of a bull market, where growth takes over, driving a market higher. Signs of strong 2020 earnings growth and growing management confidence on this issue point to continued reason for fundamental acceleration...
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