After last year’s 30% and higher gains for U.S. stocks, there’s a
lingering question of how much farther they can climb. This question is
coming from those who already have stocks and want to know if now is the
time to bail, and by those who are showing up late to the big party and
wonder how much longer the band will keep playing. It’s easy to
understand why the question is being asked, though it’s harder to arrive
at a definitive answer.
Stock and bond markets are approaching an inflection point. The Federal
Reserve’s bond-buying program known as quantitative easing is being
steadily wound down, and the Fed is preparing for short-term interest
rates to start going up.
One of the coldest and snowiest winters in recent memory is thankfully
behind most of us. As spring unfolds across the nation, we’re getting
the first glimpse of the harsh weather’s actual impact as companies
begin to report earnings for the first quarter of 2014.