8 Reasons To Stay Bullish On Stocks

15
3
Favorite

8 Reasons To Stay Bullish On Stocks

seekingalpha2021-04-20

Summary Major fundamental tailwinds can still drive stocks higher. Market valuations looks attractive considering forward earnings estimates. We are bullish on tech and also see value in emerging ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment（3）

maddiericola
·2021-04-20
Really?
Reply
1
Report
Fold Replies
- alicialicia:
  thanks
  2021-04-23
  Reply
  Report
xxiinn
·2021-04-20
Waiting for all to go up
Reply
2
Report
Fold Replies
- xxiinn:
  ??
  2021-04-21
  Reply
  Report
- JunRenTan:
  Yess
  2021-04-20
  Reply
  Report
- sayseng:
  Yes!
  2021-04-20
  Reply
  Report
View more 1 comments
Wallstrtbets
·2021-04-20
Dun bluff.
Reply
5
Report

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/1163308396?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2021-04-20 20:43","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"1163308396","market":"us","top_or_hot":-1,"title":"8 Reasons To Stay Bullish On Stocks","media":"seekingalpha","content":"<div>\nSummary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging ...\n\n<a href=\"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>8 Reasons To Stay Bullish On Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n8 Reasons To Stay Bullish On Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging ...\n\n<a href=\"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":".SPX","symbol_name":"S&P 500 Index","start_time":0,"source_url":"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks","article_id":"1163308396","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1163308396","pubTimestamp":1618922615,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attracti","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{".SPX":"S&P 500 Index",".DJI":"道琼斯",".IXIC":"NASDAQ Composite"},"translate_title":"看好股票的8个理由","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{".DJI":0.9,".IXIC":0.9,".SPX":0.9},"content_text":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging markets that can outperform going forward.\n\nPhoto by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n\nStrong Economic Growth\nAttractive Valuations Looking Ahead Towards 2022\nEarnings Momentum\nAccommodative Fiscal and Monetary Policies\nStabilizing Interest Rates\nWeaker U.S. Dollar\nImproving Emerging Markets Environment\nEncouraging COVID data\n\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\nSource: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer credit card debt which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\nSource: IMF\nStrong Earnings Outlook For the S&P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\nSource: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\nSource: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\nSource: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\nSource: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\nSource: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\nfinviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a 1 in 14,000 chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every at-risk group should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\nSource: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&P at 4,500 or approximately $450 for the SPDR S&P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\nSource: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\nSource: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\nSource: finviz.com","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":371802225,"gmtCreate":1618925458867,"gmtModify":1704716956966,"author":{"id":"3579898276440444","authorId":"3579898276440444","name":"maddiericola","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3579898276440444","authorIdStr":"3579898276440444"},"htmlText":"Really?&nbsp;","listText":"Really?&nbsp;","text":"Really?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/371802225","repostId":1163308396,"repostType":4,"repost":{"id":"1163308396","kind":"news","pubTimestamp":1618922615,"share":"https://ttm.financial/m/news/1163308396?lang=&edition=fundamental","pubTime":"2021-04-20 20:43","market":"us","language":"en","title":"8 Reasons To Stay Bullish On Stocks","url":"https://stock-news.laohu8.com/highlight/detail?id=1163308396","media":"seekingalpha","summary":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attracti","content":"Summary\n<ul>\n <li>Major fundamental tailwinds can still drive stocks higher.</li>\n <li>Market valuations looks attractive considering forward earnings estimates.</li>\n <li>We are bullish on tech and also see value in emerging markets that can outperform going forward.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/57dc25f34f3248ddb7d4088b576c4e5b\" tg-width=\"1536\" tg-height=\"864\">Photo by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n<ol>\n <li>Strong Economic Growth</li>\n <li>Attractive Valuations Looking Ahead Towards 2022</li>\n <li>Earnings Momentum</li>\n <li>Accommodative Fiscal and Monetary Policies</li>\n <li>Stabilizing Interest Rates</li>\n <li>Weaker U.S. Dollar</li>\n <li>Improving Emerging Markets Environment</li>\n <li>Encouraging COVID data</li>\n</ol>\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\n<img src=\"https://static.tigerbbs.com/1f2f15c493c0403f4023db254f627c3f\" tg-width=\"640\" tg-height=\"480\">Source: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer&nbsp;credit card debt&nbsp;which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\n<img src=\"https://static.tigerbbs.com/982ec619ffa585d9214d49286e24d02c\" tg-width=\"640\" tg-height=\"363\">Source: IMF\nStrong Earnings Outlook For the S&amp;P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&amp;P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&amp;P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\n<img src=\"https://static.tigerbbs.com/09dd692c88e4a9c3b3eea95e08587d22\" tg-width=\"640\" tg-height=\"459\">Source: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&amp;P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\n<img src=\"https://static.tigerbbs.com/d4a5afcdbbd36d331b19641d69f44143\" tg-width=\"640\" tg-height=\"448\">Source: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&amp;P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\n<img src=\"https://static.tigerbbs.com/0777b894fafdde0df25b6d1e89ca4cea\" tg-width=\"640\" tg-height=\"361\">Source: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&amp;P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&amp;P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&amp;P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&amp;P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\n<img src=\"https://static.tigerbbs.com/cbb83d9d642535aeddaf2a537d2cebd8\" tg-width=\"640\" tg-height=\"683\">Source: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\n<img src=\"https://static.tigerbbs.com/23a2f83496ce43a00b0aba9aae39d554\" tg-width=\"640\" tg-height=\"261\">Source: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\n<img src=\"https://static.tigerbbs.com/dd96f50b349bc799a3f1f29c36f358f8\" tg-width=\"640\" tg-height=\"275\">finviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&amp;P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a&nbsp;1 in 14,000&nbsp;chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every&nbsp;at-risk group&nbsp;should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very&nbsp;low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\n<img src=\"https://static.tigerbbs.com/72a2aad570b158affa2f2dde027dadf7\" tg-width=\"640\" tg-height=\"429\">Source: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&amp;P at 4,500 or approximately $450 for the SPDR S&amp;P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\n<img src=\"https://static.tigerbbs.com/698fbf62439d76a799eca7d9c739c095\" tg-width=\"640\" tg-height=\"190\">Source: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\n<img src=\"https://static.tigerbbs.com/10f2a05c9c72b45a66111a147b0ea2c9\" tg-width=\"640\" tg-height=\"197\">Source: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our&nbsp;top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\n<img src=\"https://static.tigerbbs.com/26dbc7993004dc9ce9bc6c3152431e94\" tg-width=\"640\" tg-height=\"193\">Source: finviz.com","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>8 Reasons To Stay Bullish On Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n8 Reasons To Stay Bullish On Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging ...\n\n<a href=\"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite",".DJI":"道琼斯"},"source_url":"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1163308396","content_text":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging markets that can outperform going forward.\n\nPhoto by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n\nStrong Economic Growth\nAttractive Valuations Looking Ahead Towards 2022\nEarnings Momentum\nAccommodative Fiscal and Monetary Policies\nStabilizing Interest Rates\nWeaker U.S. Dollar\nImproving Emerging Markets Environment\nEncouraging COVID data\n\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\nSource: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer credit card debt which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\nSource: IMF\nStrong Earnings Outlook For the S&P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\nSource: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\nSource: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\nSource: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\nSource: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\nSource: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\nfinviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a 1 in 14,000 chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every at-risk group should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\nSource: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&P at 4,500 or approximately $450 for the SPDR S&P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\nSource: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\nSource: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\nSource: finviz.com","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4111617,"gmtCreate":1619161770865,"gmtModify":1663225767650,"authorId":3572214398550610,"author":{"id":3572214398550610,"idStr":"3572214398550610","authorId":3572214398550610,"name":"alicialicia","avatar":"https://static.tigerbbs.com/c4b23ee891a1061c7907495a9c7da890","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371802225,"type":1,"supId":0,"prevId":0,"content":"thanks","text":"thanks","html":"thanks"}],"langContent":"EN"},{"id":371158617,"gmtCreate":1618922900539,"gmtModify":1704716911471,"author":{"id":"3570541108181800","authorId":"3570541108181800","name":"xxiinn","avatar":"https://static.tigerbbs.com/70b21ae15619b83c626e395bcdb1e927","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3570541108181800","authorIdStr":"3570541108181800"},"htmlText":"Waiting for all to go up","listText":"Waiting for all to go up","text":"Waiting for all to go up","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":4,"repostSize":0,"link":"https://ttm.financial/post/371158617","repostId":1163308396,"repostType":4,"repost":{"id":"1163308396","kind":"news","pubTimestamp":1618922615,"share":"https://ttm.financial/m/news/1163308396?lang=&edition=fundamental","pubTime":"2021-04-20 20:43","market":"us","language":"en","title":"8 Reasons To Stay Bullish On Stocks","url":"https://stock-news.laohu8.com/highlight/detail?id=1163308396","media":"seekingalpha","summary":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attracti","content":"Summary\n<ul>\n <li>Major fundamental tailwinds can still drive stocks higher.</li>\n <li>Market valuations looks attractive considering forward earnings estimates.</li>\n <li>We are bullish on tech and also see value in emerging markets that can outperform going forward.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/57dc25f34f3248ddb7d4088b576c4e5b\" tg-width=\"1536\" tg-height=\"864\">Photo by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n<ol>\n <li>Strong Economic Growth</li>\n <li>Attractive Valuations Looking Ahead Towards 2022</li>\n <li>Earnings Momentum</li>\n <li>Accommodative Fiscal and Monetary Policies</li>\n <li>Stabilizing Interest Rates</li>\n <li>Weaker U.S. Dollar</li>\n <li>Improving Emerging Markets Environment</li>\n <li>Encouraging COVID data</li>\n</ol>\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\n<img src=\"https://static.tigerbbs.com/1f2f15c493c0403f4023db254f627c3f\" tg-width=\"640\" tg-height=\"480\">Source: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer&nbsp;credit card debt&nbsp;which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\n<img src=\"https://static.tigerbbs.com/982ec619ffa585d9214d49286e24d02c\" tg-width=\"640\" tg-height=\"363\">Source: IMF\nStrong Earnings Outlook For the S&amp;P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&amp;P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&amp;P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\n<img src=\"https://static.tigerbbs.com/09dd692c88e4a9c3b3eea95e08587d22\" tg-width=\"640\" tg-height=\"459\">Source: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&amp;P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\n<img src=\"https://static.tigerbbs.com/d4a5afcdbbd36d331b19641d69f44143\" tg-width=\"640\" tg-height=\"448\">Source: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&amp;P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\n<img src=\"https://static.tigerbbs.com/0777b894fafdde0df25b6d1e89ca4cea\" tg-width=\"640\" tg-height=\"361\">Source: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&amp;P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&amp;P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&amp;P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&amp;P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\n<img src=\"https://static.tigerbbs.com/cbb83d9d642535aeddaf2a537d2cebd8\" tg-width=\"640\" tg-height=\"683\">Source: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\n<img src=\"https://static.tigerbbs.com/23a2f83496ce43a00b0aba9aae39d554\" tg-width=\"640\" tg-height=\"261\">Source: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\n<img src=\"https://static.tigerbbs.com/dd96f50b349bc799a3f1f29c36f358f8\" tg-width=\"640\" tg-height=\"275\">finviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&amp;P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a&nbsp;1 in 14,000&nbsp;chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every&nbsp;at-risk group&nbsp;should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very&nbsp;low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\n<img src=\"https://static.tigerbbs.com/72a2aad570b158affa2f2dde027dadf7\" tg-width=\"640\" tg-height=\"429\">Source: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&amp;P at 4,500 or approximately $450 for the SPDR S&amp;P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\n<img src=\"https://static.tigerbbs.com/698fbf62439d76a799eca7d9c739c095\" tg-width=\"640\" tg-height=\"190\">Source: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\n<img src=\"https://static.tigerbbs.com/10f2a05c9c72b45a66111a147b0ea2c9\" tg-width=\"640\" tg-height=\"197\">Source: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our&nbsp;top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\n<img src=\"https://static.tigerbbs.com/26dbc7993004dc9ce9bc6c3152431e94\" tg-width=\"640\" tg-height=\"193\">Source: finviz.com","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>8 Reasons To Stay Bullish On Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n8 Reasons To Stay Bullish On Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging ...\n\n<a href=\"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite",".DJI":"道琼斯"},"source_url":"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1163308396","content_text":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging markets that can outperform going forward.\n\nPhoto by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n\nStrong Economic Growth\nAttractive Valuations Looking Ahead Towards 2022\nEarnings Momentum\nAccommodative Fiscal and Monetary Policies\nStabilizing Interest Rates\nWeaker U.S. Dollar\nImproving Emerging Markets Environment\nEncouraging COVID data\n\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\nSource: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer credit card debt which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\nSource: IMF\nStrong Earnings Outlook For the S&P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\nSource: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\nSource: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\nSource: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\nSource: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\nSource: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\nfinviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a 1 in 14,000 chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every at-risk group should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\nSource: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&P at 4,500 or approximately $450 for the SPDR S&P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\nSource: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\nSource: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\nSource: finviz.com","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4091205,"gmtCreate":1618987234758,"gmtModify":1680784930296,"authorId":3570541108181800,"author":{"id":3570541108181800,"idStr":"3570541108181800","authorId":3570541108181800,"name":"xxiinn","avatar":"https://static.tigerbbs.com/70b21ae15619b83c626e395bcdb1e927","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371158617,"type":1,"supId":4083530,"prevId":0,"content":"??","text":"??","html":"??"},{"id":4083774,"gmtCreate":1618925126816,"gmtModify":1680784814690,"authorId":3573983504762209,"author":{"id":3573983504762209,"idStr":"3573983504762209","authorId":3573983504762209,"name":"JunRenTan","avatar":"https://static.tigerbbs.com/ed2cce8d13ab172b5b3ae58c94b2d0b3","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371158617,"type":1,"supId":0,"prevId":0,"content":"Yess","text":"Yess","html":"Yess"},{"id":4083527,"gmtCreate":1618922934930,"gmtModify":1680784813591,"authorId":3573211284448483,"author":{"id":3573211284448483,"idStr":"3573211284448483","authorId":3573211284448483,"name":"sayseng","avatar":"https://static.tigerbbs.com/fabcad9e067a8f135e171baf6de7fb58","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371158617,"type":1,"supId":0,"prevId":0,"content":"Yes!","text":"Yes!","html":"Yes!"},{"id":4083530,"gmtCreate":1618922947105,"gmtModify":1680784812460,"authorId":3581566234264416,"author":{"id":3581566234264416,"idStr":"3581566234264416","authorId":3581566234264416,"name":"EstelleaT","avatar":"https://static.tigerbbs.com/626554df79228662244f85ac14647d88","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":371158617,"type":1,"supId":0,"prevId":0,"content":"[Miser]","text":"[Miser]","html":"[Miser]"}],"langContent":"EN"},{"id":371151329,"gmtCreate":1618922828161,"gmtModify":1704716909992,"author":{"id":"3566244878628904","authorId":"3566244878628904","name":"Wallstrtbets","avatar":"https://static.tigerbbs.com/6c38bbee1121ea92508ad9508fa15c5e","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1,"idStr":"3566244878628904","authorIdStr":"3566244878628904"},"htmlText":"Dun bluff.","listText":"Dun bluff.","text":"Dun bluff.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371151329","repostId":1163308396,"repostType":4,"repost":{"id":"1163308396","kind":"news","pubTimestamp":1618922615,"share":"https://ttm.financial/m/news/1163308396?lang=&edition=fundamental","pubTime":"2021-04-20 20:43","market":"us","language":"en","title":"8 Reasons To Stay Bullish On Stocks","url":"https://stock-news.laohu8.com/highlight/detail?id=1163308396","media":"seekingalpha","summary":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attracti","content":"Summary\n<ul>\n <li>Major fundamental tailwinds can still drive stocks higher.</li>\n <li>Market valuations looks attractive considering forward earnings estimates.</li>\n <li>We are bullish on tech and also see value in emerging markets that can outperform going forward.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/57dc25f34f3248ddb7d4088b576c4e5b\" tg-width=\"1536\" tg-height=\"864\">Photo by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n<ol>\n <li>Strong Economic Growth</li>\n <li>Attractive Valuations Looking Ahead Towards 2022</li>\n <li>Earnings Momentum</li>\n <li>Accommodative Fiscal and Monetary Policies</li>\n <li>Stabilizing Interest Rates</li>\n <li>Weaker U.S. Dollar</li>\n <li>Improving Emerging Markets Environment</li>\n <li>Encouraging COVID data</li>\n</ol>\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\n<img src=\"https://static.tigerbbs.com/1f2f15c493c0403f4023db254f627c3f\" tg-width=\"640\" tg-height=\"480\">Source: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer&nbsp;credit card debt&nbsp;which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\n<img src=\"https://static.tigerbbs.com/982ec619ffa585d9214d49286e24d02c\" tg-width=\"640\" tg-height=\"363\">Source: IMF\nStrong Earnings Outlook For the S&amp;P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&amp;P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&amp;P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\n<img src=\"https://static.tigerbbs.com/09dd692c88e4a9c3b3eea95e08587d22\" tg-width=\"640\" tg-height=\"459\">Source: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&amp;P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\n<img src=\"https://static.tigerbbs.com/d4a5afcdbbd36d331b19641d69f44143\" tg-width=\"640\" tg-height=\"448\">Source: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&amp;P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\n<img src=\"https://static.tigerbbs.com/0777b894fafdde0df25b6d1e89ca4cea\" tg-width=\"640\" tg-height=\"361\">Source: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&amp;P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&amp;P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&amp;P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&amp;P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\n<img src=\"https://static.tigerbbs.com/cbb83d9d642535aeddaf2a537d2cebd8\" tg-width=\"640\" tg-height=\"683\">Source: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\n<img src=\"https://static.tigerbbs.com/23a2f83496ce43a00b0aba9aae39d554\" tg-width=\"640\" tg-height=\"261\">Source: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\n<img src=\"https://static.tigerbbs.com/dd96f50b349bc799a3f1f29c36f358f8\" tg-width=\"640\" tg-height=\"275\">finviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&amp;P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a&nbsp;1 in 14,000&nbsp;chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every&nbsp;at-risk group&nbsp;should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very&nbsp;low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\n<img src=\"https://static.tigerbbs.com/72a2aad570b158affa2f2dde027dadf7\" tg-width=\"640\" tg-height=\"429\">Source: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&amp;P at 4,500 or approximately $450 for the SPDR S&amp;P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\n<img src=\"https://static.tigerbbs.com/698fbf62439d76a799eca7d9c739c095\" tg-width=\"640\" tg-height=\"190\">Source: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\n<img src=\"https://static.tigerbbs.com/10f2a05c9c72b45a66111a147b0ea2c9\" tg-width=\"640\" tg-height=\"197\">Source: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our&nbsp;top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\n<img src=\"https://static.tigerbbs.com/26dbc7993004dc9ce9bc6c3152431e94\" tg-width=\"640\" tg-height=\"193\">Source: finviz.com","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>8 Reasons To Stay Bullish On Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n8 Reasons To Stay Bullish On Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-20 20:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging ...\n\n<a href=\"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite",".DJI":"道琼斯"},"source_url":"https://seekingalpha.com/article/4419952-8-reasons-to-stay-bullish-on-stocks","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1163308396","content_text":"Summary\n\nMajor fundamental tailwinds can still drive stocks higher.\nMarket valuations looks attractive considering forward earnings estimates.\nWe are bullish on tech and also see value in emerging markets that can outperform going forward.\n\nPhoto by babyrhino/iStock via Getty Images\nWith some eye-popping returns from stocks over the past year, any sign of volatility starts the inevitable chatter in the market questioning if and when \"the top\" is in. Our take is that there are plenty of reasons to remain bullish with major fundamental tailwinds that can continue to support more upside. Investors need to focus on the big picture and recognize that macro conditions are not only positive but have even progressed better than expected across everything from the global growth outlook, to corporate earnings, and also the COVID situation. We believe the following points will ultimately push stocks higher from current levels and any selloff here is a buying opportunity.\n\nStrong Economic Growth\nAttractive Valuations Looking Ahead Towards 2022\nEarnings Momentum\nAccommodative Fiscal and Monetary Policies\nStabilizing Interest Rates\nWeaker U.S. Dollar\nImproving Emerging Markets Environment\nEncouraging COVID data\n\nStronger Than Expected Macro Outlook\nThe global economy has come a long way compared to the early stages of the pandemic that at one point teetered towards apocalyptic scenarios. While attempting to control the public health crisis continues to be a challenge, the strategy to mitigate economic disruptions through an all-in approach to fiscal and monetary stimulus has worked as intended. To be clear, we were skeptical at one point and we may have even been a reluctant bull, but the following data points are hard to ignore.\nThe evidence has been the pattern of steadily improving economic indicators that in many ways surpassed even the most optimistic expectations at this point 1 year ago. In March the FED upgraded its 2021 U.S. GDP growth forecast to 6.5%, from the 4.2% estimate back in December. Compared to the 3.5% GDP decline in 2020, the setup here is not only a full recovery but also growth compared to the 2019 peak. Similarly, the FED now expects the unemployment rate to reach 4.5% by the end of the year which is an impressive turnaround compared to the official peak unemployment rate of 14.8% in Q2 last year.\nSource: Fed\nThere is every reason to believe these GDP growth estimates are achievable, and we can make the case that the final result may even be stronger. Companies are doing record levels of business right now into the post-pandemic recovery with COVID restrictions being relaxed set to add a further boost.\nOne of the most bullish trends for us is the level of consumer credit card debt which has declined by nearly 20% or over $200 billion from pre-pandemic levels. Essentially with spending options like travel and entertainment limited over the past year, many consumers were able to save and pay down revolving debt. Going forward, that \"household-deleveraging\" may support higher spending with pent-up demand generating positive impacts to all sectors.\nIt's important to note that these trends are global. Beyond the U.S. economy, many countries are set to experience a similar rebound. The International Monetary Fund \"IMF\" is forecasting 6.0% GDP world growth, more than reversing the 3.0% drop last year. Notably, this estimate was also revised higher from 5.5% in January. The Asia region is already seeing record levels of growth which is positive for the global industrial production outlook.\nSource: IMF\nStrong Earnings Outlook For the S&P 500\nAt the end of the day, the macro perspective needs to translate to corporate earnings to be positive for stocks. Indeed, one of the most bullish factors for the market is the trend in higher earnings. We look at the S&P 500 bottom-up EPS estimates for 2021, which is the aggregate of the EPS forecasts across all underlying companies. The S&P 500 is forecast to earn $176.76 in 2021, up 26% year over year.\nSource: FactSet/ annotation by author\nThis is not just a case of EPS growth benefiting a base effect of depressed earnings last year. This year's estimate is also 8.5% above the previous 2019 record. The 2020 leaders from technology and healthcare that were overall resilient to COVID or even got a boost in demand are expected to continue growing. There are also groups of sectors that were significantly impacted by the pandemic like industrials, energy, and materials that are already showing a strong rebound. On the other hand at the industry level; airlines, restaurants, hospitality as a few notable examples that are still in the early stages of their recovery which will add to growth going forward.\nWhat we want to highlight is the estimate for next year in 2022 where the S&P 500 is forecast to earn $202.83 representing an annual increase of 15%. We discuss further below how the outlook for 2022 plays into what is an attractive market valuation at the current level. Considering that the pandemic is still ongoing and a \"return to normal\" environment only emerges in the second half of this year, 2022 will be the first full year of a normalizing economy. The consensus is that most companies will be positioned to benefit from what is a strong macro momentum that will drive higher earnings across all sectors.\nSource: FactSet\nMarket Is Cheap Looking Out Towards 2022\nThe chart below tracks the S&P 500 P/E ratio on a trailing-twelve-months basis going back to 2011 with a 5- and 10-year average of 22x and 19x for each period respectively. The current level at 34x is a metric that many bears will point to as evidence the market is \"a bubble\" or extremely overvalued.\nSource: FactSet/ annotation by author\nThis is simply the wrong way to be analyzing the market considering the last year was an exceptional period where various sectors were significantly impacted by the pandemic. It makes more sense to look ahead into an environment where the economy and companies will be operating on all cylinders. In other words, investors should ignore 2020 earnings as it relates to valuations as the forward outlook can make more sense.\nFrom the S&P 500 bottom-up EPS estimates for 2021 and 2022, we can calculate the forward and \"1-year forward\" P/E ratio which in our view places the market valuation into the correct context. Considering the S&P 500 EPS estimate of $176.76 for this year against the current index price of around 4,150, the forward P/E multiple of 24x begins to appear more reasonable.\nFor 2022, the S&P estimate to earn $202.83 implies a 1-year forward P/E of 20x. At this level, if the bottom-up EPS outlook is confirmed, the setup is attractive in our view heading into what is expected to be a record period for an economic growth environment. In essence, with an assumption that the global pandemic ends this year, 2022 will be more reflective of true underlying earnings potential across the entire stock market. The higher importance of technology stocks including the contribution of high-growth leaders that are just beginning to really scale in terms of earnings helps justify higher multiples compared to historical market trends.\nEarnings Momentum\nGetting past some of the abstract concepts like bottom-up EPS and forward multiples, the underlying trends from the companies that matter is what makes the difference. Even into the current Q1 earnings season, the mega-cap banks that have already reported set the stage for what is a very strong growth momentum across the board.\nThe table below highlights some of the largest S&P 500 companies expected to report earnings still this month. This group represents nearly 40% of the index weighting and have otherwise monster estimated EPS and revenue growth numbers not just for Q1 by also expected to continue through next year. The average company here is set to increase EPS 20% this year and again 15% in 2022.\nSource: author\nOf course, it's always possible a particular company underperforms or misses its estimates but there's little reason to believe earnings trends as a group is going to collapse from here. Our point here is that it's hard to be \"bearish\" on the market when the mega-cap leaders are generating such positive numbers. Particularly impressive are the estimates for the \"FANG\" stocks that already had a record 2020. Amazon.com Inc (AMZN) which is down about 5% from its recent high is expected to grow EPS 39% y/y in 2022.\nFrom the table above, while most stocks are up year to date, the average in the group is down about 5% from their 52-week high. A bullish outlook can target these previous levels as near-term upside potential. Many of these stocks look attractive considering their earnings momentum through next year and the bullish case is that the estimates are conservative with potential revisions higher going forward.\nStabilizing Rates Outlook is Bullish\nA development this year that has added to some volatility is the trend in climbing interest rates. The benchmark 10-year U.S. Treasury yield currently at 1.6% is up from a low of 0.5% last year and now at the highest level since before the pandemic. The move over the past several months makes sense considering the improvement in economic conditions forces some pricing pressures adding to long-term inflation expectations. Favorably, the fallout has been relatively contained in light of stocks continuing to trade near all-time highs with the positive signals the trend implies largely outweighing the negative impacts.\nSource: CNBC/ annotation by the author\nThe issue goes back to inflation expectations. With an understanding that price pressures may spike into the upcoming summer months, the other side to that is a belief that those pressures will ultimately be temporary as the economy normalizes through next year. We'll put this down as a risk to watch but downplay any concerns that the current level of rates is significantly negative for stocks.\nCompared to the accelerated pace of the bond selloff in Q1, we believe the climb in rates will be more moderate going forward towards our year-end yield target of 2.0% in the 10-year. Since 2017, the 10-year Treasury yield has averaged about 2% and we believe it's a level the market can absorb. In other words, the economic growth outlook can outweigh the consequence of higher rates in the near term.\nWeaker Dollar is Positive for Risk Assets\nWe are also watching the trend in the U.S. Dollar which has been on a downward trend since the highs of last year. When we look at the \"Dollar Index\" it's important to note that this is a basket of currencies with the exchange rate against the Euro comprising nearly 60% of the weighting. In this regard, taking a bearish view on the Dollar can also be stated as being bullish on the Euro and other foreign currencies. Fundamentally, themes like a higher U.S. fiscal deficit and public debt along with more attractive yield opportunities in international markets pressure the Dollar and is largely positive for the broader macro environment.\nfinviz.com\nAs it relates to stocks, nearly 50% of all revenues from S&P 500 companies are based outside the U.S. meaning that a weaker Dollar drives the value of earnings higher from companies' global operations. It is to the benefit of the U.S. when the global economy is strengthening as it supports global trade and overall risk sentiment.\nIn line with a weaker U.S. Dollar, commodities from soybeans, copper, oil, iron ore have been very strong driven by both tight supply conditions due to the pandemic along with the expectations of improving demand. Laggards from 2020 in the basic materials and the energy sector directly benefit but we positive externalities extend to other sectors.\nCOVID - Light at the End of The Tunnel\nWhether it's controversial or not, our take is that the COVID pandemic is on its last legs. Data from the CDC now confirms that vaccinated individuals have just a 1 in 14,000 chance of contracting COVID which means the vaccines work as intended to prevent deaths. In the U.S. nearly 4 million vaccinations were administered in a single day last week which is a pace that would suggest every at-risk group should be completely vaccinated within the next month. We expect mortalities to begin plummeting which should be the all-clear sign for the economy to begin fully reopening giving confidence to the economic growth outlook.\nWhile this is a topic everyone has an opinion on, the one insight we can add is that based on data showing children under the age of 17 have a very low risk of death, the total number of vaccines that ultimately need to be administered worldwide to significantly limit deaths is lower than the actual global population. Just focusing on people over the age of 65 would reduce COVID deaths by 95%. Most countries are starting with the elderly populations first.\nSource: OurWorldInData\nInternationally, it's encouraging that vaccinations are ramping up and we believe the rest of the world could be 3 or 4 months behind the U.S. curve. In some ways, the lingering uncertainty represents the bullish case for stocks as there are still investors skeptical of the potentially positive outcome for COVID by the end of this year. We believe the post-pandemic recovery will be very positive for the macro outlook and corporate earnings.\nThe Risks to Watch\nOur intention here is not to play cheerleader or sugarcoat the outlook. Risks are always present in stocks and the narrative can change quickly. One of the most concerning scenarios would be the emergence of some COVID variety that is more fatal and resistant to current vaccines forcing a reassessment of the post-pandemic recovery. As a tail-risk, COVID will likely remain an issue within the investing outlook for the foreseeable future.\nWe mentioned inflation and a scenario where the CPI spikes to levels above 4%-5% leading to expectations getting \"unanchored\" from the current baseline would likely also be negative for stocks. We want energy and commodity prices to remain elevated, but getting too hot could also have some negative consequences. The first sign of such deterioration would be an accelerated spike in rates meaning a bond selloff as it could force the FED to take a more aggressive hawkish stance. Finally, geopolitical issues including stability in regions like the Middle East or political rhetoric towards Russia and or China could also add to volatility.\nHow to Trade It\nTactically, we have a year-end price target on the S&P at 4,500 or approximately $450 for the SPDR S&P 500 ETF (SPY) representing about 8% upside. Considering the index is already 11% higher year to date and 5% in just the past month, we expect the pace of gains to moderate but remain bullish. On the downside, the 4,000 index level is an important area of support that we believe can hold on any near-term selloff.\nSource: finviz.com\nWe aggressively bought the dip in tech stocks during the March pullback and while the group is up significantly in recent weeks, we continue to see upside for the sector driven by strong earnings growth from the mega-cap tech leaders. Among \"FANG\" stocks, Facebook Inc.(NASDAQ:FB)is one of our top picks and the current $300 level is a solid buying opportunity for a company that trades at just 22x 2022 earnings estimates.\nSeparately, we are also bullish on high-growth names in thematic segments like cloud-computing and cannabis stocks which remain in correction territory from their highs of the year, setting up a good buy-the-dip opportunity. The Global X Cloud Computing ETF(NASDAQ:CLOU)which includes 36 stocks across a basket of internet and \"SaaS\" names is a good option to gain exposure to a group of companies that benefit from generational growth tailwinds with disruptive applications. Notably, the fund is nearly flat from a level going back to September 2020 and we like the value at the current level.\nSource: finviz.com\nAnother area where we see alpha is in emerging markets which we believe can likely outperform going forward. Beyond China, we like exposure to countries that can benefit from a strengthening local currency against the dollar and get a boost from the strong commodity pricing environment as a macro driver. We recently covered Brazil stocks as representing our top contrarian idea.The iShares MSCI Emerging Markets ETF(NYSEARCA:EEM)is an easy way to capture diversified exposure to foreign stocks with positive tailwinds in a post-pandemic recovery.\nSource: finviz.com","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":15,"commentSize":3,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}