Sonders on "The Story No One Is Telling"

Charles Schwab Chief Investment Strategist Liz Ann Sonders says that many investors are allowing macroeconomic concerns to overshadow positive microeconomic news — and she says the macro picture is actually getting better on many fronts.

“The vast majority of questions I’ve been getting at events are of the macro variety. Rarely am I asked about what companies are doing or saying, about corporate earnings, about the stock market’s short- or even longer-term fundamentals,” Sonders writes in commentary on Schwab’s web site. “One of the things I like to talk about at events is what could actually go right (and maybe already is). I am always most intrigued by the story no one is telling.”

Sonders says she doesn’t have “blinders on, but I want to lay out a realistic case for a better macro (and market) environment than many are expecting.” She points to the fact that several economic data points — initial unemployment claims, the number of people employed in the private sector, corporate profits, durable goods orders, and more — are better than they were a year ago.

“US corporations have amassed a nearly $2 trillion cash war chest, allowing them to go from huge sellers of stock at the market’s weakest point in 2009, to buyers and acquirers of stock in four of the five quarters through 2011’s first quarter,” she notes in discussing the state of the private sector. Generally, she says, that tends to be good for stocks. “Unless we’re wrong and the economy doesn’t exit the soft patch soon, US corporations are likely to be a positive factor for the supply and demand for equities.”

Sonders also says the dramatic recent shift in the market bodes well for stocks in the short- to medium-term, based on historical norms. And she talks about how history shows that low consumer sentiment — which we’re still seeing — is a bullish sign.