I am optimistic, as I have been for 2017 and the years before (2017 ). I believe that the rally will continue in 2018. There are at least 4 arguments for my believe:
1. Company profits will continue their strong growth. The pessimistic majority underestimates how efficiency gains and technological progress enable companies to create rising earnings. During the recessions of the years 2001/02 and in 2008 companies restructured and reduced costs significantly in order to survive. Now they are much fitter and more efficient than before. I believe that this learning process will continue and will translate into a long term trend of rising company profits.
2. We are experiencing a new industrial revolution. Rapid advances in software & Internet (including cloud computing), robotics, 3D printing, nanotechnology, genetic engineering and other technologies are all reducing costs, raising efficiency, lifting the productivity of the economy significantly and are creating new markets.
3. The new US president is more business friendly than his precursor (scottgrannis). His administration stopped the trend to more regulation and cut company taxes significantly. This will boost investment and hiring and so strengthen the tailwinds for the US economy.
4. We also are having solid tailwinds from the emerging markets which are getting even stronger. The catching-up process in China, India, Indonesia and a lot of other countries translates into high growth in large parts of the global economy that creates continuously rising revenues & profits for global companies like Starbucks, IBM, Caterpillar, Apple and other members of the S&P 500.
Below an image I found on Twitter
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