Investors are showing a growing willingness to take on risk, but many are questioning the sustainability of the US bull market.
Chris Watling, global economist and chief market strategist at Longview Economics, warns that the market is due for a pause.
“The bull market in the States [US] rarely goes more than two, two and a quarter years without a big break. It doesn’t have to be a bear market, but certainly a big break, a multi-month pullback. Maybe it’s 10%, maybe it’s a little bit more than that,” Watling says, citing the S&P 500 (^GSPC) trends going back to the 1970s.
Additionally, Watling attributes this potential pause to weaker-than-expected US economic growth. “Also, it looks to us that not only is the bull market looking tired from a technical perspective, but I think the US economy is going to struggle in the first half of this year,” he says.
He points to reduced fiscal support, ongoing tariff debates, and sector rotations globally as factors contributing to these challenges.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. https://finance.yahoo.com/videos/series/morning-brief/
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