The longevity of the current bull, and stocks’ high prices relative to company sales and earnings, have raised the stakes for what’s next. A new bear market — meaning a drop of 20% or more in the Dow and other indexes — could in turn quickly undermine the business confidence and spending crucial for Trump’s “Make America Great Again” agenda. There’s another possibility too: Rather than a bull or a bear, the market could temporarily morph into something much gentler — a patient, lamb-like market that isn’t exciting but also does no great harm. A 2017 market “melt-up” is the official forecast of Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch. The 1987 bear market was one of the shortest in history, lasting just 3.3 months.

Source: Los Angeles Times January 15, 2017 11:01 UTC