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.