10-11-24 Market Moment
By Randy Williams Gurian on October 11, 2024
Bull Markets – Gotta Love ’Em
I often ask myself how this bull market can continue, given all the economic uncertainty and geopolitical risks. By now you know I enjoy answering my own rhetorical questions, especially when we are in October and the U.S. major market averages are at or near record highs.
The answer is easy if you have seen this movie before. Bull markets will go a lot further than most expect, and the reason is simple: our age-old nemesis, Mr. Market. Mr. Market is telling investors to doubt the strength of the bull market only because he enjoys confusing you. Most know I am a longtime student of the market and I have experienced several market cycles in my career. Here’s the logic Mr. Market doesn’t want you to remember. Economic cycles cause the equity and fixed-income markets to move in either the upward (positive) or downward (negative) direction. Stocks are telling us the current bull market is alive and well and investors should remain invested. I think this bull market has a long way to go before it capitulates. How can I be so sure? Earnings for the third quarter—which begin to be reported in earnest next week—should be strong; the Fed should, and will, continue to lower interest rates; inflation is looking more muted all the time; and finally, artificial intelligence is going to change how the world interacts with computers and technology in ways that have just begun. Stay invested and don’t miss the best part of the movie. Trust that it’s not the final scene yet.
The baseball playoffs are underway. The Philadelphia Phillies have been eliminated. I continue to hope the Yankees are next. I am a firm believer that big payrolls don’t always win the World Series, and of course my disdain for the Yankees is deeply felt. I am happy the Mets will be playing for the national league pennant after eliminating the Phillies. If Detroit—with an $18M payroll—knock out the Guardians, my theory about the baseball gods is correct and someday, just maybe, the Mariners can play for all the marbles in the Fall Classic.