Back on September 13, I posted a piece entitled The Wall of Worry Remains in Place.
Coincidentally, the S&P 500 Index was just embarking on a string of closing highs that hit 20 as October turned the page. It’s impressive.
Credit moderate growth at home—GDP in the U.S. has run at 3% or higher for the past two quarters, a streak that was last matched in 2014.
But, do not discount the acceleration in economic activity around the world. China, Europe, emerging markets, and even Japan have been posting respectable numbers.
One critical byproduct for investors—a sustained uptick in corporate profit growth.
But it doesn’t stop there.
The Fed has been cautious in hiking interest rates, and inflation remains low by historical standards.
If I had to concoct a recipe for a bull market, I wouldn’t hesitate to mix in all three components.
Looking ahead
No one can consistently call the highs and lows in a cycle, and I’m not about to buck the trend. International or political jitters could spark a new round of volatility. We’ve seen it before.
But anxieties were short-lived as worries receded amid the backdrop of a fertile economic environment for stocks.