We all stop to catch our breath now and then – it is a chance to recoup before getting moving again. The US market will get moving again as well. Companies still have vast cash balances that will fuel mergers & acquisitions activity and share buybacks, while the income from equity dividends also looks favourable in today’s world of negative yields. Valuations are higher, but not stretched, and there is no fear of a bubble. But overall, the lower oil price and increase in liquidity by the actions of the ECB and the Bank of Japan can stimulate global growth, which will support earnings in the long run, even if they suffer in the near term.
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