Fidelity takes stock of the market with a ‘thought leadership report’

Fidelity Investments, a Boston-based financial services company, expressed cautious optimism about the US stock market continuing its strong performance.

In a new “thought leadership report” titled, “Can the Sweet Spot for Stocks Continue?” the take-away seems to be, “Maybe --- but don’t forget about risk.”

A press release tied to the report included a statement from Jurrien Timmer, co-portfolio manager of Fidelity Global Strategies Fund and director of Global Macro for Fidelity’s Global Asset Allocation division.

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“While I believe the US equity market could continue to gain strength, there are risks on the horizon, including China’s overheating credit boom, rising gasoline prices, technical divergences, and spread product liquidity,” Timmer said.

According to Fidelity’s analysis, four factors --- economic momentum, monetary stimulus, technical conditions, and investor sentiment --- “have converged to create a sweet spot for US stocks.”

“All in all, I see a stock market that could well continue to gain strength in the coming weeks, but there are enough risks on the horizon to warrant maintaining a balanced portfolio,” Timmer said.