A bullish investment outlook is supported by five "constants" in an ever-changing world, according to DataTrek co-founder Nicholas Colas.
These "constants" exist because "human nature doesn't actually change all that much," DataTrek co-founder Nicholas Colas said. "First reflected in asset prices, which are then validated by improving corporate earnings, and those are eventually reinvested in hiring. Every cycle is a bit different in terms of speed and corporate winners/losers, of course. But in our book, it is way too early to grow overly cautious on US stocks," Colas said.
But COVID-19 data, like case counts, hospitalizations, and mortality rates, is less relevant than fiscal and monetary relief measures when it comes to assessing the direction of stocks, according to the note."Earnings always recover before labor markets really begin to heal. In fact, it is those marginal corporate earnings that allow for rehiring in businesses that can actually use the labor productively.