What is the bull case on the S&P 500 right now??
I don't understand what is keeping the market up. What are you playing for if you are long? Recession coming is almost consensus now and yet the market still holds up around 3,000. What are all of the bears missing?
The bear case is quite clear:
-Fiscal benefit to the economy from tax cuts is fading;
-Recession risks from elevated debt (credit card, auto where credit quality deteriorating, student loan, corporate);
-Housing price growth slowing if not already peak;
-Unemployment rate at peak (even the U6 is peakish)
-China trade war is a headline risk;
-Healthcare choking the consumer and will get worse else it's reformed to provide much lower prices (which would in turn crash 20% of the US economy);
-Already seeing recession in some countries;
-2020 political risk: Biden winning feels like negative news, Bernie or Warren winning feels like awful news to the market on risks of a rollback in tax stimulus;
-Business investment slowing;
-Earnings entering recession;
-Yet the s&p is still expensive on earnings.
The only bull case I can muster up is recession in 3 years rather than 1... but then you are playing a horrifically weak hand - you are a seller at the first data point indicating recession so why bother buying? You are better off going to Vegas and betting on 13-36 on roulette every year.
I'm looking for a fundamental explanation here rather than technical color (mumbo jumbo on Fibonacci levels) or trading color (eg corporate buybacks)