A rising tide of capital expenditure (capex) spending by U.S. companies will drive a stock market rally that could last as long as five years, BMO Capital Markets Chief Investment Strategist Brian Belski says.
In a message delivered to several news outlets, Belski argued that U.S. companies will soon start using their increasing cash piles to invest in their own businesses. He sees it as the next logical progression for companies with strong balance sheets.
Of the four ways a company can spend cash, he said, three have already been widely employed.
"What typically happens is you have a surge of [stock] buybacks, which has occurred. You have a surge of dividends, which has occurred," Belski told Bloomberg News. He also noted the wave of recent mergers and acquisitions.
Capex is the fourth way, and Belski not only thinks it's inevitable, he says the corporate growth that will result will power a stock market rally that will last "at least three to five years" and could well be the beginning of a "super bull market" that could go on for as long as 15 to 18 years.
"We think this train has a very long tail," Belski told Breakout.