Is the bull market over?

Is the bull market over? The simple answer is no. There are many analysts out there who warn that the market is about to enter a bear phase. But I disagree. In my view, the bull market will continue to run for the remainder of 2015 and well into 2016. Yes, from a sector wise, there are some stocks or sectors that appear to be overpriced. But there are still many individual stocks that are fairly priced or even under-priced.

The US economy – though remains sluggish – is about to enter a period where we will witness a private spending splurge and a modest wage growth. The European economy will continue to grow, albeit the growth rate might not be as fast as some might predict. China will surprise us with better economic results in various fronts, though Chinese public investments will be far less than what we have seen in recent years. Japanese investors will look outside of Japan for better yield, while Japanese companies grow modestly in the near future. India and other south/east Asian economies will continue to create demand, although the pace might be slower than the hype. Demand from African markets is a question mark. And the same could be said of the Latin American markets (though I could be wrong here).

In essence, private demand across the world is set to increase in the remainder of 2015 and 2016, while public investments take a significant dip. That combined with a relatively stronger dollar will put a lid over many commodity prices. Australia is a market that I would advise to stay away from until we see clearer directions for the future of the commodity prices.

All the above said views of mine do not mean that there is no structural risk involved in many of the economies that I mentioned. But those risks are far from derailing the bull market for now. Barring any unforeseen geopolitical events (like ‘Grexit’ for example), I don’t see a bear market in formation. Yes, there could be tantrums in the market in the second half of 2015 – but those tantrums will be short lived and the bull market would continue to run as we enter into 2016.

Thus in my view, the bull might run a little slower from this point with occasional stops and retreats, but the bear is still well into his sleep.