With the equity markets continuing their upward climb, many investors have been focusing their attention toward equity valuations when determining whether or not the bull market will end. And that approach does make sense. After all, investors will only pay so much for stocks and be willing to overlook sky-high prices for so long before they take profits.
But that might not be the 100% right place to be looking.
What they should be doing is looking at credit trends. Credit – and the availability of cheap credit – has been one of the biggest drivers of stock and economic gains. And according to investment bank State Street, credit conditions are still pretty rosy.
Will equities continue their run? If history is any guide, they will.