by John Simons

March 9, 2011

The Stock Market Rally Lives On. But Can It Continue?

  • J. Michael Salley
  • Registered Principal
  • Salley Wealth Advisors Group, LLC
  • Summerville, SC
  • YES.
  • “There are several important factors that point to higher stock market valuations:
  • A. We are fully entrenched in an economic recovery in the US, gone are the sentiments and opinions about the possibility of a double-dip recession. As this recovery advances, albeit slowly, the stock market will continue to forecast this improving growth of the economy.B. The health of corporate America is very strong and will continue to improve. The deleveraging and strengthening of balance sheets has had a dramatic positive impact upon corporate earnings. The majority of companies continue to report earnings that are above Wall Street’s estimates. At the end of the day, it is earnings, or the lack thereof that mostly influences stock prices. I believe this trend of improving earnings will continue.C. Consumer confidence and sentiment continues to improve. In fact, a week ago I read a news article that pointed out that this improvement was more evident in the African American community, based on several surveys that were taken D. Lastly, there are trillions of dollars still sitting on the sidelines in a near zero interest rate environment, because of the fear and anxiety generated by this latest severe economic downturn. These assets will be forced to move into equities as the picture continues to brighten.”

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