Salient to Investors:

Liz Ann Sonders at Charles Schwab said:


  • The secular bull market is intact as valuation and sentiment are supportive – this bull market will be the best is our lifetime.
  • US businesses are sitting on huge cash levels not seen since WWII and we will see an increase in capital spending this year.
  • Inflation is in check, held back by money that is not multiplying and that has also kept economic growth low.
  • We are a long way from the point where lending matches deposits.
  • For the first time since WWII, US manufacturing is up 3 years in a row, though from a very low base and still only 13% of the economy.
  • Forward P/E ratios are around the historic median level and bull markets rarely stop at the median P/E. The average trailing P/E of every bull market since the 1950s is 18.7 versus the current level of 16.6.
  • Profit margins are at or near all-time highs but historically is not a problem for the market.


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