Rising US yields
US 10 year government bond generic yield
Steeper yield curve in the US
US 3 months vs. 10 years yield curve
Better economic numbers
ISM Non-Manufacturing Sept 2018
Source: Institute for Supply Management, Bloomberg
All this unsettles the equity markets. Too much good. It is easy to argue that the good time will not last and the correction in equity markets will finally happen. All so true.
The time is the hard issue. Timing has always been a challenge especially in bull markets. The time tested indicators may be flashing some yellow warning signs. However, as so often they may be early not by weeks buy quarters. Just entering some of the best period in the market history.
Fourth quarter of a calendar year till the end of the second quarter are generally strong.
This period particularly into the pre-election year shows even stronger performance.
Source: Oppenheimer & Co., Bloomberg
Well behaved Federal Reserve with clearly communicated policy.
Global central banks showing tolerance for higher inflation.
Trade disputes making it all look sour is arguably a long shot.
Markets are afraid of the news to their own peril. Fundamentals last longer than news.