Despite some recent dips, many experts believe the bull run of the last several years still has room for upside. Tony Dwyer, a market strategist with Canaccord Genuity, suggested we are no where near a market peak.
During a roundtable discussion on TheStreet’s “Trading Strategies” segment, Dwyer said that the spread between two and ten-year treasury notes are not narrow enough to represent a peak. Even during the worst dips of the past 3 market cycles, markets still gained about 36.9% over 20 months.
Additionally, senior investment strategist Brian Levitt stated “something like 25% of the returns comes in the last two years of [a bull market, and] we don’t even know that we’re necessarily there yet. We’ll know we’re ‘there yet’ with inflation significantly higher in the United States, a flatter or inverted yield curve and a strong dollar. [But] we’re not there yet.”
More evidence that the bull run would continue was found in February’s job report. The nation created about 313,000 jobs in February, which beat the record for most jobs created in a month since July 2016. In addition, the number of jobless Americans remained at 4.1%, representing a 17-year low.
Speculation that the Federal Reserve would increase rates due to wage inflation is often cited as a key culprit behind the recent dips. However, Wall Street ditched these speculations after the recent strong jobs report. “A strong jobs report with less wage inflation tells the market that current concern about the wage issue is overblown,” said Jonathan Golub, a strategist working for Credit Suisse.
The job report will also give clues to how much the incoming steel and aluminum tariffs will affect the job market. Some have implied Trump’s new tariffs could ignite a trade war with Europe. Comparing February’s numbers with new reports will represent the tariffs’ impact on manufacturing.
Article By: Frank Marino-Moore