Valens Market Phase Cycle Monitor & Corporate Credit Macro View for June 2019

June 21, 2019

  • Investors may find pause in buying a market approaching all highs, but improving credit signals provides confidence in buying the Bull market
  • Business credit has been flashing early warning signs for 2020 or 2021, providing a market overhang. Recent signals give reasons to think this overhang has been removed, potentially confirming an all clear sign for the next year and beyond
  • Profits and profitability continue to rise to all time highs across US corporations (UAFRS adjusted, accurate calculations)
  • US firms are likely to use profits to increase capital investments in 2019
  • The combination of profitability and growth, with low to no credit risk, suggests continued US equity upside in 2019
  • Investor sentiment has remained neutral even after the recent rally back to all time highs, implying this rally is not extended and there is still room for the market to run