Why the bull market will not die in 2016

U.S. markets are open for the last week of trading of 2015 after an extended holiday weekend. It will be another shortened week as most markets around the world close on Friday, New Year’s Day.

As traders look ahead to 2016, some market watchers are expecting to celebrate the bull market’s seventh birthday. “We think this economic cycle continues to go and as economic cycle goes, thus goes earnings and therefore stock prices,” said Burt White, chief investment officer at LPL Financial.

“It’s not old age, it’s excesses. And we’re not seeing excesses, we’re not overspending, we’re not over buying, we’re not over borrowing, we’re not over leveraged, and we’re not overvalued,” added White on why the bull market will not die in 2016.

The money manager thinks investors will face the same uncertainties in 2016 as they did this year, including falling oil prices and China. “But the biggest uncertainty that we unwound was the Fed and certainly having the Fed begin to begin its more normalization process is going to unlock quite a bit of opportunity,” he said.

Falling oil prices has been a big driver for pushing the markets lower in 2015. White is forecasting energy prices to stabilize next year, “but the real aspect there in the big component piece is the dollar.”

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Technology is a sector, White thinks will benefit from the Fed raising rates in 2016. “We look for technology to really benefit from very attractive valuations as well as business spending begin to increase,” he said.

 

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