Bullish for Stocks?
Expansions end when the economy hits a recession. Extrapolating from the past five business expansions the current expansion is expected to last until March 2019 according to Ed Yardeni.
Right now, the economy in the US and the economies around the world are humming along pretty nicely. US market returns by sector since Feb. 2016 look like this: (data from yardeni.com)
Financials (51.1%),
IT (50.3), Materials (40.0),
Industrials (36.9),
S&P 500 (33.0),
Consumer Discretionary (32.1),
Health Care (22.0), Energy (19.8),
Real Estate (19.3),
Utilities (17.0),
Consumer Staples (14.9),
and Telecom Services (1.5).
The #'s since the beginning of the bull market in March 2009:
Consumer Discretionary (471.2%),
Financials (380.3),
Information Technology (379.8),
Industrials (336.6),
S&P 500 (259.4),
Health Care (253.0),
Materials (214.2),
Consumer Staples (191.0),
Utilities (137.8),
Telecommunication Services (81.5), and
Energy (56.5)
There is a lot of hot air about there about pending destruction of the US economy due to debts. We'll look at this in closer detail in future posts. In the meantime, when companies are achieving continually higher earnings quarter after quarter, the downturn is still a ways off.
Image Courtesy Pixabay: https://pixabay.com/photo-1487990/