Good afternoon. After a rough day and indeed a rough few sessions in the stock market, investors may be asking themselves if this fabulous bull run off the early March 2009 lows is over. To that we say, most likely not. With interest rates at or near multi-decade lows, an accommodative monetary policy, reasonable valuations, earnings growth and VERY tame inflation, we think THIS IS A PAUSE TO REFRESH rather than the beginning of something more than a 5%-8% pullback.
However, it is arrogant to believe you KNOW what is going to happen. Things may change. There is a good chance that Presidential Politics may get very ugly over the next few months and should stocks pay too much heed to the rhetoric, we could be in for a very choppy market.
Therefore, the “weather” market forecast for now is clouds giving way to sun over the next few days (meaning this correction should bottom over the next week or two and no more than a few more percentage point drop) at best and at worst some additional lasting choppiness. We would be inclined to use this pullback to add to long-term secular growth stories.