Bull Run in the Stock Market to Continue Despite Drop in Performance

The stock market has been on a roll over the last few months. The Dow, for example, has already hit 54 record highs this year alone. It’s also up 19% from the same period last year. However, the big question that still remains unclear in the minds of many investors is whether this Bull Run will continue. Well, Wall Street pros don’t think so. Analysts are predicting a slight drop of between 3% and 5%. However, this is unlikely to erase the massive gains the market has already made so far.
Investors who have invested in the stock market long enough know the kind of volatility that can sometimes rock the financial markets. In 2000 for example, stocks in the US plunged massively after recording a sharp rise. Also, the 2007-2008 recession was perhaps the worst period for the stock market. The market lost nearly half its value at the time.

However, the outlook this time is promising. Analysts argue that despite the predicted slight drop in growth, the geopolitical and economic factors that determine market movements have remained positive. Strong corporate earnings and economic growth around the world are some of the factors that will keep the stock market steady. 
In addition to this, the factors that precipitated market meltdowns in the past are simply not present. For example, the US economy has recorded robust growth in the recent years and this trend is expected to continue in the near future. Investor sentiment is also positive. And finally, we are not expecting a big spike in interest rates around the world.

With everything considered after analysts are clear that while eventually stocks will suffer some setbacks, they will not be lethal enough to lead to a market collapse or anything near to that. The only challenge now is that no one really knows when these setbacks will come. Despite this, analysts agree that it’s very difficult at the moment to be bearish. There are a number of reasons for this. Most important of them though is related to projected corporate earnings for many US companies. Early indications show that a significant majority of US corporations are on track to post at least a 10% improvement in earnings this year. This growth margin is also expected in 2018.

Some analysts are also betting on the Bull Run to continue. Although stocks appear to have hit their peak at the moment, there could still be more room left to run. The argument is that even if stocks eventually run into setbacks, they will rebound much quicker towards a trajectory of growth once again.
Risks still remain though. The growth experienced in financial markets so far has been steady and rapid. It’s very likely that investors and fund managers may want to take advantage of this bullish run by putting more money on stocks with the hope that this trend will continue for the foreseeable future. Nonetheless, investors will keep an eye on economic data and any spikes in interest rates just to see how these factors will affect the market. The proposed tax reforms by the Trump administration are also expected to have an effect. We will just have to wait and see.