Happy New Year!
So many statistics. So many pundits. It’s been nearly 70 months since the March 2009 bottom of the stock market and the train keeps on rollin’. U.S. equities are up 240% since the bottom. One study said the average bull market has been 50 months and another said 68 months. However you measure, it’s been a long run – and it continues. The U.S. is doing particularly well. Since the global financial crisis, the U.S. dollar has outperformed virtually all currencies other than the Swiss Franc (it has appreciated 92% vs. the Russian ruble). The U.S. national deficit is down to 2.8% of GDP, which is pretty good, if you ignore the local government deficits. The official U.S. unemployment rate is under 7%, which is better than it was, even if it ignores the declining labor participation rate which leaves around 90 million working-age Americans without jobs. U.S. GDP was up 5% in Q3; Japan’s was down; and the Euro area was flat.
And now what?
Probably another year of the same – maybe better. Inflation is low; interest rates are low; oil prices are low; corporate debt is down; consumer confidence is on the rise. There is a trillion dollars of unspent cash waiting to be deployed by private equity and VC firms and another half trillion dollars on the balance sheets of tech companies. Meanwhile, China is still growing fast; Japan, which has seen its share of woes, seems to be on the rise; and the Eurozone is working hard to stimulate growth. We need them to keep this train on the tracks. Yes, it’s true that all is not perfect in the world. There is war, crime, inequality, injustice, poverty, and disease. There are too many politicians who would rather pontificate than make progress; too many political “leaders” threatening their neighbors; too many people using religion or other ethnic distinction as an excuse to kill people. There are too many policemen being killed by disaffected people looking for meaning to their life. In France this week, some self-righteous ideologues killed a dozen people because they didn’t like what was published in a magazine. Really! Those things are real; they are bad; and unfortunately they probably will continue. For the people affected they can be devastating. The only silver lining is that those are not enough to derail this train – yet. I think 2015 is safe – for most of us.
Marlin & Associates issues a report that focuses on our current sense of m&a values, activity, and trends for the dozen plus very specific sectors that we follow and sometimes lead. Read the full market update here: http://buff.ly/12WU0NO