Thursday, July 21, 2016

Stock Market: Return To Normality

 (Drivebycuriosity) There is a lot ado about the current stock market rally. It seems that many don't understand the recent stock market gains. A lot commentators complain and claim that the rally is overdone and the market is overheating.           
                                                         They are wrong. Stocks are just swinging back to normality. The SP500, the gauge for the US stock market, gained about 6 percent year-to-date and around 4 percent in the recent 12 months. These numbers are below the long term average gains of the US stock market which are around 7 percent annually.      

The recent gains are just erasing the losses caused by the general pessimism in the begin of the year and shortly after Brexit. These losses were unjustified. The global economy is doing fine as the recent data show (US job market,retail sales in the US & China and more). The earnings season also started encouraging . There is a high chance that the rally will continue fueled by solid economic data and company earnings.

Sorry this post is written on my iPhone because of technical problems with my MacBook

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