The current bull market in US equities began in March 2009. The decade that followed has seen US equities rally by 300%. The early years were dominated by concerns about fiscal and monetary policy on the one hand, and the sub-par growth on the other.
As US banks worked through their non-performing loans, corporate America went on a Capex diet. Margins and free cashflow ballooned as managements recalibrated their growth aspirations. By 2012, the US banking system was largely fixed and the Federal Reserve embarked on a gradual reversal of crisis era policies. Buybacks became a key component of the corporate armoury and helped boost earnings even as the strong dollar and collapsing commodity prices became an issue in 2015. Corporate earnings are now up around 240% from 2009, which explains most of the rally to date. The compositio...
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