Is a Bear Market Coming? A Response to Pessimists

Some analysts have been forecasting the end of the economic expansion and bull market in stocks for awhile. In fact, both are on the verge of setting longevity records. This article explores the records and why the expansions have continued. It also forecasts they are likely to continue for a while.

Don’t be nervous. It might be a bit early to make this call, but I will make it anyway: I have trouble putting anything more than trivial odds on a recession in 2018, or even 2019. At this point, the best bet is that this expansion, which started in 2009, at least ties — if not beats — the current record of 10 years.

One important point to remember when evaluating recession calls is that the economy is far more resilient to negative shocks than bears like to believe. Consider that the economy survived the 1987 Stock Market Crash, the 1997 Asian Financial Crisis, the European Financial Crisis of 2011/2012, and — possibly most important because of its domestic origin –- the 2015 Shale Oil Bust, without teetering into recession.