No sign of impending doom in market

Morningstar's Gregg Warren thinks rising earnings and buybacks will help drive the market even if rates do move higher.

Greggory Warren, CFA 6 February, 2018 | 6:00PM



Gregg Warren: I think the conventional wisdom right now is that this market's being driven by expectations for higher inflation and for an increase in interest rates. I'm not necessarily sure if that's the real reason behind it. When a market tends to go up over time, and we start hitting historic highs, there are people that are always looking for ways to take some profit. This just could be the sign that some people are taking some money off the table overall. When we look at the market as a whole, we see some good, positive signs out there. The tax cuts should boost earnings this year, should also increase the level of share repurchases. You've got a lot of companies out that are already saying that absent the tax cuts they're still going to see solid sales and earnings growth this year. It's not the normal signs that we would see of impending doom for both the economy and the markets overall. This could just be one of those more healthy corrections along the way.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
BlackRock Inc704.25 USD-2.44
Cohen & Steers Inc69.91 USD-3.14
Invesco Ltd21.12 USD0.84
T. Rowe Price Group Inc160.12 USD-0.30
The Interpublic Group of Companies Inc24.88 USD-1.31
The Walt Disney Co162.52 USD-4.15

About Author

Greggory Warren, CFA

Greggory Warren, CFA  Greggory Warren, CFA, is a financial services sector strategist for Morningstar.

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