Stock market surge nearing its end?

In a recent analysis for DZ Bank, Christian Kahler predicts a likely continuation of the stock rally into 2022. Kahler's analysis suggests that the prevailing sentiment does not indicate strong overbought conditions or excessive optimism, and moderate volatility is present in the stock market.

Since 1990, the S&P 500 has only rarely fallen below its long-term average, with the notable exception of the 2008 financial crisis. According to Kahler, the index spent roughly the same amount of time above and below this average. This builds further upside potential for the stock market.

Many quality companies have seen their valuation multiples fall and their fundamentals improve. The uptrend in earnings is continuing, which is a positive sign for the market. Investors who bought practically every small dip in the recent past are now seeing high returns.

Kahler, however, questions whether these relationships still apply due to the long-term decline in interest rates and expectations of future low interest rates. He notes that the US stock market has reliably returned to its long-term average valuation from the 1870s to the 1980s, but the current low-interest-rate environment may affect this trend.

Neither the dot-com crash at the beginning of the 2000s nor the sell-off caused by Corona in spring 2020 could stop the market, according to the analysis. This further supports Kahler's belief that it would be unwise to leave the stock market at this point due to the strength of the price rally.

It's important to note that there are no specific publicly available forecasts by Christian Kahler for the stock market in 2022, nor detailed information on which companies reduced their valuation multiples to improve their fundamentals in the provided search results.

The S&P 500 has reached 48 new highs in 2021, but the gains are lower than in 2020. Despite this, the market continues to show resilience, with the index remaining above its long-term average.

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In conclusion, while there are always risks associated with investing in the stock market, Kahler's analysis suggests that the current rally is likely to continue into 2022. However, it's always important to do your own research and consider your own risk tolerance when making investment decisions.