Why it is too early to worry about a bear market for stocks

We think there is scope for equities to keep climbing from here, and it is all down to the longevity of the business cycle, writes Luca Paolini, chief strategist at Pictet Asset Management.

Ours seems to be a minority view. While most investors agree with us that business conditions are buoyant, many fear that certain characteristics of the current upswing leave the economy vulnerable to a sharp and sudden reversal if interest rates rise further, dragging equity markets down along the way. Industry reaction: Fed will have to 'tread carefully' amid rising debt and weak economic data The bears contend that a backdrop of low inflation, anaemic bank lending and business investment, and a heavy reliance on extraordinary monetary stimulus make it more likely that the economy w...