Markets rise but rally could be “last hurrah”

Markets rose on Monday.

The S&P 500 rose 0.9 percent, the STOXX Europe 600 rose 0.6 percent and the Nikkei 225 jumped 1.2 percent.

The gains in stocks notwithstanding, Scott Minerd, chief investment officer for Guggenheim Partners, tweeted that markets should not ignore the risks of a trade war and that the current rally may be “the last hurrah”.

Minerd has also said that yield curve flattening is sending a strong signal of a looming recession.

Similarly, Howard Gold at MarketWatch warned that the rise in the unemployment rate to 4 percent in June from 3.8 percent in May could be a sign that it has bottomed and that the economic cycle is turning.

Gold pointed out that the low unemployment rate of each business and market cycle over the past 70 years preceded a recession by 9.2 months and a bear market by 14.8 months on average.

He concluded that “nine years into a bull market and economic recovery, we’re much, much closer to the end than the beginning, and an unemployment rate hitting bottom may signal that as clearly as the ringing of a bell”.

Meanwhile, Morgan Stanley Chief US Equity Strategist Michael Wilson has noted “changing attitudes toward risk assets”.

“Our suspicion is that this rally may prove to be a bull trap that provides the perfect opportunity to position more defensively,” he wrote in a report.