Liz Ann Sonders, chief investment strategist with Schwab, believes the bull market will continue. She points to:
- The lack of new net inflows into equity mutual funds (unprecedented in a bull market like the current one);
- The S&P has crossed its 50-day moving average more than 50 times so far this year (much higher than earlier in the bull market);
- Stock buybacks may be supporting rises in stock prices;
- The Fed is signaling a slow tightening of interest rates, which historical data suggests produces higher returns than a fast tightening;
- The economy has added 13.5 million jobs since the financial crisis.
Purported contrary trends, such as a potential profits recession, may be explained in ways that do not contradict a bull market, Sonders suggests. Declining profits, she says, are mostly concentrated in the energy sector.
A closely fought “tug-of-war” between bulls and bears has kept stocks trading in a tight range this year, and Charles Schwab strategists think the battle could continue for a while longer.
The cyclically adjusted price/earnings ratio is quite elevated compared to historical standards. Is that bad news for stocks? Charles Schwab’s Liz Ann Sonders says it’s a complicated question.
In a wide-ranging interview with Barry Ritholtz on Bloomberg’s Masters In Business podcast, Charles Schwab’s Liz Ann Sonders offers her take on the bull market, and a look at her early years working for the great Martin Zweig.
In the investing world, the standard thinking seems to be that the older you get, the less risk you should take on. But Charles Schwab’s Liz Ann Sonders says that’s not always the case.
For some time now, a number of strategists have been saying we may be headed for a correction. Charles Schwab’s Liz Ann Sonders says we may be getting one — without the market decline usually associated with a correction.
Charles Schwab’s Liz Ann Sonders says that the risk of a correction is elevated, but she thinks the bull market is still in tact.