U.S. stocks are in the midst of a “secular bull market,” according to Jeffrey Saut, chief investment strategist for Raymond James, who forecasts “at least another eight years left” of the current run.
Saut made that conclusion Tuesday at Cohn Reznick’s Seventh Annual Liquidity and Capital Raising National Forum at Convene in Manhattan. The strategist said secular bull markets can last for 14 or 15 years, sometimes as long as 18 or 20 years. He pegged the current bull market as beginning in October 2008.
Saut also expects Janet Yellen, chair of the Board of Governors of the Federal Reserve Systems, to “raise rates very slowly.” The strategist noted that he doesn’t see any hints of a recession, and that the secular bull market run is in the middle stages that could have three or four more years to go before it transitions into the late and last of a three-stage cycle.
During the morning session, the financial advisory firm asked attendees to participate in a quick multi-question survey that showed 90 percent of participants were “very confident about the strength of the U.S. economy in 2018.” Further, 80 percent said they believed that over the course of the next 6 to 12 months, market conditions and economic conditions would make that time frame a good period for M&A activity, while 94 percent said the same time period would be a good time to borrow money.
Cohn Reznick’s Robert C. Moss, the company’s national director of governmental affairs who keeps track of what’s going on over at Capital Hill, said the immediate concern is trying to get an agreed-upon budget for 2018. He noted that one of the issues concerns President Donald Trump’s independence. “No one has any idea what he will do next,” Moss said, adding that his independence makes him an “unpredictable leader.” As for the debate on tax reform, Moss said most Americans don’t want corporations to pay less in taxes. Their concern is, “What about me? What about cutting my taxes?” he said.
Stephen M. Wyss, the consumer industry leader at the financial services firm, said one of the concerns expressed by some attendees centered on the impact of wage increases and rising labor costs overall. The consensus seemed to be on investing in their employees by paying above the minimum wage requirement to obtain quality staffing, while at the same time reducing the overall number of positions and having employees do more.
WWD also caught up with Wyss after the event. He said the companies that will do well in 2018 are those that know how to interact with their customer base. “Health, beauty and wellness will do well, while apparel and accessories will continue to be challenged,” he said. According to Wyss, the commoditization of apparel — as well as all the discounting and promotions at retail — has changed the value proposition for consumers. And apparel will continue to face challenges because the “perceived value in apparel isn’t there yet,” he said.