Key insights
- Carson Group's strategist suggests the bull market remains strong despite oil price volatility, citing robust corporate profits and profit margins as "dual tailwinds." He notes the market's resilience to negative news and high investor worry, implying potential for upside if positive catalysts emerge. High oil volatility is a concern, but historical data suggests the market can withstand high oil prices if volatility subsides.
In the video above, Carson Group's chief market strategist, Ryan Detrick, chats with Yahoo Finance's Josh Lipton and Jared Blikre about what he says is the "message of the market" (^DJI, ^GSPC, ^IXIC) and the "dual tailwinds" that are driving the bull market, even amid recent oil (CL=F, BZ=F) price volatility.
You mentioned worries, Ryan. One potential worry for investors, they're watching oil. got Brent at around 100, got price at the pump, you jump from 3:00 to 4:00. Uh can the stock market power through that?
I think it can. You know, clearly we need oil to slow down and to stop going up. I mean, that's not saying anything probably everybody doesn't know out there. Um but you look back at like 2011, 2012, we had really high oil and the markets did okay. It's just that volatil It's like the dollar. People say, oh, the dollar's high, the dollar's weak. It's volatility markets don't like. and this historic volatility we've seen in the oil markets. clearly that's kind of upset the Apple cart. But still, honestly, five weeks ago you'd said oil done when it's done, the headlines we've seen, all this stuff, yet the S&P would have a 9% pullback. I mean, that's saying to me, the message of the old school John Murphy, RIP John Murphy passed away recently. Um
the message of the market is there's still something in there. I think that's net positive by the fact that we've withstood so much negativity and everyone's so worried on the other side that maybe that beach ball's under the water, get some good news and and you know, that that ball can go up too.
To your point there, you just mentioned profit margins uh just a little bit ago. So profits and also profit margins. Um, just tell us about that because you posted a couple charts recently to your X feed and we I believe we have some of those. So just tell us about that.
We'd like to say the dual tailwinds for this bull market, I've said this for three years now, are higher profits and higher profit margins. Since the war started, all right? S&P 500 12-month estimates on earnings are up like over 3%. Since the war started. Since the war started. Okay, earnings are up like 3%. I mean, that's kind of really? But yes. Now, all 11 sectors actually have higher earnings guidance also, but the majority of that, like I mean like 90% of it, have come from tech. and I get it, tech's been the area that's been hit a lot, but like you just said, it's been bouncing back. So there's some positive there and and profit margins time we're doing this, 15%. All right, they were 12% back in 2019. People said profit margins are too high back then. We've been told year after year, profit margins have to roll over. Well, they haven't yet. So a profit margins trending higher and earnings trending higher. Uh those again are dual tailwinds that say, listen, this volatility is uncomfortable, the headlines are uncomfortable, but we look back 6 to 12 months from now, wouldn't be shocked at all if this bull market continues.