Fresh Signs of Stock Market Bullishness | Chief Investment Officer

And now the case for stock market optimism: As the US stock market approaches a new high, expectations are that the party will keep going.

Financial advisors are confident that the economic outlook will remain positive for the next six and 12 months, according to a poll by the Financial Planning Association’s Research & Practice Institute. For the coming six months, 57% of financial advisors are bullish that things will remain good. For the next 12 months, it gets a bit less buoyant, as 45% concur.

And the next two years, just 29% are optimistic. But that’s a ways away, right? Most forecasters are anticipating a recession in 2020.

The near-term bullishness comes as the US logged a buoyant second quarter rise of 4.1% in gross domestic product. And earnings for the second period are coming in nicely, with FactSet expecting a 24% growth rate for the S&P 500, which would be the second-highest since 2010’s third quarter (34.1%).

Meanwhile, options investors have been betting that the S&P 500 will surge higher. Credit Suisse indicates that traders have been moving strongly into bullish call options, The Wall Street Journal reported. These give the right to buy shares later on at a price that investors hope will be below the market level at the time.

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And the fear gauge, the CBOE Volatility Index, is near its lowest point since mid-January (right before the winter correction began that month).

So if the trade war or the monstrous corporate debt load or something else doesn’t intervene, life should be good for a while, eh?

Tags: call options, Stock Market, Volatility

The Maryland State Retirement & Pension System returned 8% on its investments in fiscal 2018, growing its assets by $2.8 billion, to $51.9 billion.

The 8% return also surpassed the 7.5% assumed actuarial rate.

Top assets were private and public equities, which returned a whopping 19.64% and 10.66%, respectively. The fund for state teachers and government workers for allocates 12.5% to private equity and 37.5% to public equity.

Real assets were next at 8.16%, followed by absolute return’s 3.26%. Credit returned 2.31%, and with a fifth of the assets, rate sensitive holdings gained 0.55%. Real assets, absolute return, and credit consist of 11.9%, 8.4%, and 8% of the fund’s portfolio.

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The rest of the Maryland pension system’s holdings were in cash.

Tags: Maryland State Retirement & Pension System (MSRPS), Pension, Private Equity, Public Equity