Optimism Showing Up Everywhere as Markets, Economy on the March

Mandeep Rai

Maybe it’s just the time of year, what with holiday displays, music, and lights surrounding all of us. Or maybe Wall Street traders are dipping into the eggnog a little early. But whatever the cause, one thing is clear: Optimism about the markets and the economy is showing up everywhere!

Is it justified? Take a look at our proprietary Weiss Ratings Market Barometer below and you’ll probably come to the same conclusion as us: “Yes”! Here’s what it’s showing about the current state of equity and credit markets, as well as the economic data:

You can see that markets are clearly signaling they expect good things to come.  Volatility has dropped, investor sentiment is improving, and stocks are at all-time highs – with the Dow notching its 70th new yearly high just this Monday.  Our Weiss Ratings BUY/SELL ratio has improved from a year ago, while the percentage of stocks in bear territory is slipping.

Meanwhile, hiring managers are creating and filling new positions, unemployment is dropping, and purchasing managers are buying new equipment.  Even housing is doing a lot better, with new starts and building permit applications rising.

The only potential sour note is in the credit markets. They’re clearly looking for more inflation, and not getting it. That’s why our Treasury yield spread indicators are falling. But with hiring strong and wage growth likely to follow, I think faster inflation is just around the corner.

Bottom line: The markets are pricing in optimism … consumers are out shopping and spending their earnings … and businesses are spending and investing to keep up with demand. Thus, we’re in the midst of a virtuous feedback loop of prosperity, even without a concrete tax reform bill yet signed.

Once we do get a tax package enacted, I expect markets to head even higher on the promise of higher earnings. That should favor the kinds of companies with higher tax rates that I shared with you previously.

And with that, please allow me to wish you and your family a safe and happy holiday season. Happy investing!

Best wishes,

Mandeep

About the Senior Analyst

Mandeep spent six years on the NYSE trading floor and worked in private equity valuations for General Electric. Today, he mines the vast Weiss database to formulate investment and trading strategies for stocks, ETFs and cryptocurrencies. His strategies boast a proven track record of significantly outperforming the benchmarks.

Top Tech Stocks
See All »
B
MSFT NASDAQ $421.32
B
AAPL NASDAQ $170.69
B
NVDA NASDAQ $906.95
Top Consumer Staple Stocks
See All »
B
WMT NYSE $60.60
Top Financial Stocks
See All »
B
B
V NYSE $278.81
B
JPM NYSE $199.44
Top Energy Stocks
See All »
B
B
CVX NYSE $157.50
B
COP NYSE $127.35
Top Health Care Stocks
See All »
B
AMGN NASDAQ $285.87
B
SYK NYSE $357.96
Top Real Estate Stocks
See All »
Weiss Ratings