(New York)

Big bank Credit Suisse thinks the stock market rally will keep going. They say the big gains this year are mostly because of improved investor sentiment on the back of a more dovish Fed, weaker inflation, and the better prospects for a US-China deal. Further, the bank’s chief US equity strategist says “Our work indicates that investors have not fully re-risked portfolios following 4Q’s turbulence—despite a sharp decline in volatility and spreads—and that valuations will drift higher as they do so”.

FINSUM: We have to tentatively agree with this view. Sentiment is up, and combined with lower valuations and the fact that investors have not fully re-entered the market, there does seem to be a good runway higher.