May 15, 2017
By Peter Bower
The U.S. stock market has gone a long time without a significant pullback. It has certainly had a few bad days, but not much follow through.
Down periods seem to attract immediate buying. Investors seem to have a bias toward giving the economy and the stock market the benefit of the doubt; optimism rules the day. Obviously, there is plenty of money around to fuel recoveries as well as runs to new highs.
With central banks around the world still in reflation mode, this makes sense. The danger comes into play when the financial system tightens up. Our Federal Reserve is on a very slow tightening cycle back to normality. Other central bankers are still full throttle in easing mode. However, this does not mean that a significant sell-off cannot occur. Unforeseen events, including geopolitical shocks, have occasionally rocked markets in the past. These usually pass quickly and provide buying opportunities. Stay steady, my friends.
The Lonely Bull
