Ricchiuti: Market is in a ‘Stealth Rally’

Tulane University’s Peter Ricchuiti, the world’s only stand-up comedian currently employed as a professor of economics, paints an optimistic picture of the current and future economy and the resulting impact on the financial markets. Delivering the keynote address of the NTSA 403(b) Summit to a packed house June 22, Ricchiuti highlighted the key factors and dynamics underlying today’s robust economic recovery and the rosy prospects for the future.

The S&P 500 has tripled since the stock market bottomed out in 2009, Ricchiuti noted. But this 5-year rally, which he described as “the greatest stock market run since World War II,” has been what he characterized as a “stealth rally.”

Noting that overall the economy “is doing pretty well,” Ricchiuti asserted that he does not envision either a double-dip recession or, worst case, a depression. “Recessions always end, and when they do, the economy always rises to a higher plateau,” he said. The last three economic recoveries have lasted about 90 months on average, Ricchiuti noted. We’re now about 60 months into the current recovery — “or to put in in baseball terms, the middle innings.”

This year is the year we will see a “sea change” in the economy, Ricchiuti predicts. Look for economic growth to rise from the current level of about 2.5 to about 3.5 percent in by the end of the year. “That may not be much, but it will FFEL different — drawing corporate cash off the sidelines and into the market.”

Advisors should keep their eye on the real mover of the stock market, Ricchiuti noted. “Right now they’re phenomenal — just phenomenal. Look for higher numbers as they year unfolds, reaching over 11 percent in the third and fourth quarters.”