Markets mixed as 2016 comes to a close

Markets were mixed on the last trading day of the year on Friday.

The S&P 500 fell 0.5 percent. Nevertheless, it rose 9.5 percent for 2016 as a whole.

The STOXX Europe 600 rose 0.3 percent on Friday but finished the year down 1.2 percent.

The MSCI Asia Pacific Index rose 0.2 percent for a gain of 2.3 percent in 2016.

“We seem to run into resistance around these levels, which isn’t unusual given the gains we’ve seen recently,” said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group.

Indeed, Bob Pisani at CNBC thinks that investors already “seem wildly optimistic”.

“A genuine boost in consumer spending and even a modest corporate tax cut could have a significant impact on earnings. But the market is already anticipating that,” said Pisani.

Markets mixed but face "train wreck" next year

Markets were mixed on Thursday.

The S&P 500 finished flat amid mixed economic data. Jobless claims fell last week but the trade deficit rose as exports declined in November.

The STOXX Europe 600 fell 0.4 percent, with banks among the biggest losers after a report that the US Securities and Exchange Commission is probing several European banks over a Mozambican bond sale.

In Asia, the Nikkei 225 fell 1.3 percent as Toshiba continued its slide amid concerns about write-downs in its nuclear business. The Shanghai Composite Index fell 0.2 percent.

Michael Farr, president of Farr, Miller & Washington, thinks that the US stock market is building a short-term base. "I think it can provide support for the final year-end surge," he said.

Next year, however, could see a "train wreck", according to Jim Rickards.

Ricards told CNBC that president-elect Donald Trump's economic stimulus plans will not pan out, causing a "head-on collision" between perception and reality.

"Either we're going to have a recession or a stock market correction," he said.

Markets mixed but “animal spirits appear to be reviving”

Markets were mixed on Wednesday

The S&P 500 Index fell 0.8 percent but the STOXX Europe 600 rose 0.3 percent.

Earlier in Asia, the Nikkei 225 was flat, the Shanghai Composite Index fell 0.4 percent but the Hang Seng Index rose 0.8 percent.

“It’s a reminder that markets are up a lot, which leads to investors becoming more selective in their buying habits,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

Still, Liz Ann Sonders, Charles Schwab’s chief investment strategist, told Fortune that “animal spirits appear to be reviving” and that she is now overweight US stocks relative to developed international stocks.

Markets edge up to maintain momentum, "no sign" of top

Markets were mostly marginally higher on Tuesday.

The S&P 500 rose 0.2 percent and the STOXX Europe 600 rose 0.1 percent.

Earlier on Tuesday, Asian stocks were mixed, the Nikkei closing flat and the Shanghai Composite Index falling 0.3 percent.

Peter Cardillo, chief market economist at First Standard Financial, said that the "market is on momentum roll" while noting that it has "just slowed down".

That slowdown could make this week critical for stocks next year.

Ari Wald, technical analyst at Oppenheimer, said that following a rally around the year-end, the S&P has gained on average 2.8 percent in the following three-month period.

However, if the market is down during the year-end, the S&P has averaged a 1.2 percent loss in the following three months.

But for now, Wald sees a continuation of the rally. "There's no sign of a meaningful top in place," he said.

Nikkei falls, Shanghai rises as China seen meeting growth target

Most major Western markets were closed on Monday.

In Asia, the Nikkei 225 fell 0.2 percent while the Shanghai Composite Index rose 0.4 percent after being down earlier in the day.

Xinhua said in a commentary on Monday that China will meet its growth target of 6.5 percent to 7 percent growth this year.

However, a government think tank reported on Monday that property curbs introduced this year in China's biggest cities are likely to be kept throughout 2017 even as it noted that the current restrictive measures were "insufficient" and had limited effects.

Stocks seeing slow end to year but could surge in 2017

Markets were flat on Friday.

The S&P 500 rose 0.1 percent while the STOXX Europe 600 was little-changed.

"No one wants to take additional risk between now and the end of the year. They don't want to jeopardize those gains," said Stan Shipley, strategist at Evercore ISI.

Indeed, while many analysts see stocks moving higher in the remaining days of the year, most see gains being limited.

"The psychology seems to be setting up for a little bit of upward movement, not some strong 5 percent move. I think we could see a slow rise over the course of the rest of the year," said Don Townswick, head of equities at Conning.

For 2017 though, Nicholas Vardy, chief investment officer at Global Guru Capital, thinks that the US stock market could surge.

"First, the fog of the earnings recession in the S&P 500 has lifted," he said. "Second, U.S stocks have a strong recent history of outperforming in the first year of a presidency."

Markets fall, but stocks expected to resume rally

Markets fell on Thursday.

The S&P 500 and the STOXX Europe 600 fell 0.2 percent while the Nikkei 225 fell 0.1 percent.

While the US stock market fell for a second consecutive day on Thursday, some analysts remain bullish.

Jack Bouroudjian, CEO of Index Futures Group LLC, thinks that “the rally we have experienced over the last few weeks might be the 'tip of the iceberg' when it comes to the move we will see in the coming years”.

Kate Warne, investment strategist at Edward Jones, said: “We expect stocks to grind higher, but expect pullbacks if things don’t materialize as fast as people are hoping.”

Still, Ron Insana at CNBC thinks that there are risks for the stock market, especially the risk that the economy accelerates and inflation moves above the Federal Reserve's 2 percent target, which could see the central bank “move rates up farther and faster than currently anticipated by the stock market”.

Stocks fall amid "boring" market, value stocks "the place to be"

Markets fell on Wednesday.

The S&P 500 fell 0.25 percent, the STOXX Europe 600 fell 0.21 percent and the Nikkei 225 fell 0.3 percent.

Oil fell, with both Brent and WTI crude falling around 1.5 percent.

"People are taking a pause and they want to see what's going to happen," said Chris Zaccarelli, Chief Investment Officer for Cornerstone Financial Partners.

The result is that stocks haven’t been this boring since 1992.

Kevin Marder thinks that substantial post-election gains suggest a short-term pullback is possible, but in the meantime, value stocks are the place to be at.

Dow hits record as US growth could make stocks “look extraordinarily cheap”

Markets rose on Tuesday.

In the US, the S&P 500 rose 0.4 percent while the Dow Jones Industrial Average and the Nasdaq Composite both rose 0.5 percent to record highs.

Elsewhere, the STOXX Europe 600 rose 0.5 percent and the Nikkei 225 rose 0.5 percent.

US stocks continue to hit record highs amid warnings that the rally could stall, the latest such warning coming from Schaeffer’s Investment Research.

With the Dow and the S&P 500 approaching big round numbers of 20,000 and 2,300 respectively, selling is likely, said Schaeffer’s Todd Salamone.

Salamone also noted optimism coming into the market, “which usually occurs prior to a sell-off or trading range behavior”.

In contrast, Bryan Rich thinks that the stock market rally is “just getting started, and has a long way (higher) to go”.

“If we indeed get growth closer to 4% from pro-growth policies,” he wrote, “the S&P 500, relative to history, will look extraordinarily cheap.”

Markets mixed, stocks may need to consolidate

Markets were mixed on Monday.

The S&P 500 rose 0.2 percent, the STOXX Europe fell 0.1 percent and the Nikkei 225 was flat.

Markets were little-affected by the assassination of the Russian ambassador to Turkey.

However, gold rose 0.5 percent and US 10-year Treasury yields fell 5.7 basis points to 2.54 percent.

Peter Cardillo, chief market economist at First Standard Financial, noted that the market's calm reaction to the assassination of the Russian ambassador showed that there is “very little fear among investors”.

Nevertheless, further gains may be limited in the short-term.

Cardillo thinks that the “stock market reached a point where it needs to consolidate before it can move higher” while Katie Stockton, chief technical strategist at BTIG, sees “a pullback in the weeks ahead”.

Further out, a CNBC survey of 13 strategists' outlooks published since the US election found the median 2017 S&P 500 price target is 2,325, just a little higher than Monday's close of 2262.53.

After flat week, further gains may be difficult for US stocks

The US stock market was flat last week.

After touching an all-time high on Tuesday, the Standard & Poor's 500 failed to make further gains and finished the week down just under 0.1 percent. The Dow Jones Industrial Average managed to gain 0.4 percent.

Further gains may be difficult for the stock market after rallying over 8 percent since the US elections.

“We are putting fuel on the fire here potentially, because nothing has actually happened, everybody is acting like it is already happening,” said Richard Bernstein, chief executive officer of Richard Bernstein Advisors in New York.

Paul Nolte, portfolio manager at Kingsview Asset Management warned that the stronger US dollar and higher interest rates could weigh on corporate earnings. “It's just a matter of when and how,” he said.

Higher bond yields are also making bonds look more attractive than stocks. Greg Peters, Senior Investment Officer at PGIM Fixed Income, thinks there is “a big valuation disconnect” and “that will continue to keep people invested in bonds”.

However, if the economy performs well, stocks could maintain their good run.

“This economy is in good shape in our view,” said Ryan Detrick, senior market strategist at LPL Financial, “and that should be a potential positive for equities”.

Markets mixed but stock rally could run further

Markets were mixed on Friday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.3 percent and the MSCI Asia Pacific Index rose 0.2 percent. As a result, the MSCI World Index finished flat.

Analysts do not see an end yet to the rally though.

“This reflation move is real,” said Paul Christopher, global market strategist at Wells Fargo Investment Institute. “We're not calling the top by the end of this year. It could easily run into January.”

Sam Stovall, chief investment strategist with research firm CFRA, thinks that the market is seeing an early Christmas rally. “There's enough hope and anxious uncertainty that will not be resolved until well into 2017, combined with the desire to avoid paying higher taxes,” said Stovall. “Those factors will keep the market elevated.”

Stocks rise as US homebuilder sentiment surges but looking "rich" relative to bonds

Stocks mostly resumed their rally on Thursday.

The S&P 500 rose 0.4 percent while the STOXX Europe 600 rose 0.9 percent.

Kathleen Brooks, research director at City Index, wrote in a note on Thursday that “animal spirits” unleashed by Trump “have won the day”.

However, stocks were also boosted by strong economic data, in particular, the National Association of Home Builders' housing market index surging to 70 in December, the highest since July 2005, from 63 in November.

“The market can withstand more rate hikes as long as the economic growth is underpinning it,” said Quincy Krosby, a market strategist at Prudential Financial.

However, Jonathan Garber at Business Insider noted that bonds are flashing a warning sign for stocks.

Citing analysis by Societe Generale's Cross Asset Allocation team published in a note on November 18, Garber wrote that stocks are now at a level where they are “rich” relative to bonds.

Fed hikes rates, markets fall, but stocks could yet rally

The Federal Reserve raised interest rates for the first time this year on Wednesday.

The Fed increased the fed funds rate by 25 basis points to a range of 0.5 percent to 0.75 percent after its monetary policy meeting, citing “realized and expected labor market conditions and inflation”.

Fed officials projected three quarter-point rate increases in 2018 based on median federal funds forecasts of 1.375 percent in 2017 and 2.125 percent the following year.

Markets fell, with the MSCI All-Country World Index declining 0.6 percent. The S&P 500 fell 0.8 percent while the STOXX Europe 600 fell 0.5 percent.

The US two-year Treasury note yield rose more than eight basis points to 1.238 percent while the US dollar rose 1.3 percent against the yen.

Oil fell, Brent crude and US crude settling 3.27 percent and 3.66 percent lower respectively.

The Fed's decision was “largely as expected”, Ed Keon, portfolio manager and managing director at QMA, said, but “the market is taking it as a bit more aggressive or hawkish than it had thought”.

Earlier on Wednesday, though, Jim Paulsen, the chief investment strategist at Wells Capital Management, said that stocks may rally longer than even the most bullish predictions despite a Fed rate hike as the latter would be taken as an acknowledgement of the economy's improvement.

Stocks rise amid bullish sentiment as valuations hit highs

Markets rose on Tuesday.

The S&P 500 rose 0.7 percent to an all-time high, the STOXX Europe 600 rose 1.1 percent and the Nikkei 225 rose 0.5 percent.

US Treasuries were steady as the Federal Reserve began its monetary policy meeting while European bonds rose, with the Italian 10-year bond yield in particular falling 12 basis points to 1.87 percent.

The pause in the rise in bond yields may give stock investors some relief. While higher interest rates are usually thought to be bad for stocks, CNBC reported that according to LPL Financial's analysis of history, higher yields should not start affecting stock values until the 10-year note roughly doubles from its current value.

Indeed, Bespoke Investment Group reported on Monday that bets against the US stock market has declined significantly.

"With U.S. equity markets making new all-time highs post-election, sentiment has turned extremely bullish in the options market," wrote Mandy Xu, derivatives strategist at Credit Suisse, in a note on Monday.

However, this bullishness may be misplaced.

The Office of Financial Research reported on Tuesday in the US that stock valuations based on prices to earnings have reached the same high level that they hit before "the three largest equity market declines in the last century".

Investors are now vulnerable to "to heavy losses from even moderate increases in interest rates".

Stock rally pauses but emerging markets looking “attractive”

Markets were mixed on Monday.

The S&P 500 Index fell 0.1 percent but the Dow Jones Industrial Average rose 0.2 percent.

In Europe, the STOXX Europe 600 fell 0.5 percent but the oil and gas sector jumped 2.2 percent.

In Asia, the Nikkei 225 rose 0.8 percent but the Shanghai Composite Index fell 2.5 percent after China Vanke Co.’s president predicted home sales will drop “significantly” in the coming year.

Oil surged, West Texas Intermediate and Brent crude jumping 2.6 and 2.5 percent respectively. However, copper fell 1.5 percent.

Bonds continued to fall, with US 10-year Treasury yields rising as much as six basis points before dipping to end up one basis point at 2.48 percent.

While stock markets paused for a breather from its rally on Monday, Bryan Rich, founder of billionairesportfolio.com and fxtraderprofessional.com, thinks that the stock market rally is “just getting started”.

“The long-term trajectory of stocks still has a large gap to close to restore the lost gains of the past nine-plus years, from the 2007 pre-crisis highs,” he wrote at Forbes. “And from a valuation standpoint, stocks are still quite cheap relative to ultra-low interest rate environments.”

However, some analysts think that the post-election surge in US stocks could end quickly, according to a CNBC report.

“It's clear the market is willing to give President-elect Donald Trump the benefit of the doubt right now,” said Quincy Krosby, market strategist at Prudential Financial. “But if history is any guide, the honeymoon always ends.”

However, if the US stock market rally comes to a halt, there may still be opportunities in emerging markets, according to a Bloomberg report.

A survey conducted by Citigroup showed that 50 percent of respondents think emerging-market economies will re-establish themselves as a “dominant driver of global growth” in 2017, and that could lure global investors back into emerging-market stocks.

“When you take into account the relative valuation of stocks and the relative valuation of the currencies, we do see value,” said Johanna Kyrklund, head of multi-asset investments at Schroder. “When you combine the two it becomes quite attractive.”

Stocks resume rally as BIS notes resilient markets

The rally in stocks resumed last week after pausing the previous week.

The S&P 500 rose 3.1 percent, the STOXX Europe 600 rose 4.7 percent and the MSCI All-Country Asia Pacific Index rose 2.0 percent.

The Bank for International Settlements released its latest quarterly report on Sunday.

In the report, the BIS noted that markets have been "resilient". While global bond yields have risen, stocks have climbed as investors appear to have "priced in faster growth and higher corporate profits in the United States" and corporate credit spreads remained tight.

However, emerging market economies have been less fortunate. The global rise in yields and the strengthening of the US dollar weighed on the assets of emerging market economies, leading to bond outflows and exchange rate depreciation.

Stocks rise but bonds fall as rate hikes look imminent

Markets continued to rally on Friday.

The S&P 500 rose 0.4 percent to another record high while the STOXX Europe 600 rose 1.0 percent.

Earlier on Friday, the Nikkei 225 jumped 1.2 percent while the Shanghai Composite rose 0.5 percent.

Commodities mostly rose. West Texas Intermediate crude rose 1.3 percent but gold fell 0.9 percent.

Government bonds fell. The US 10-year Treasury yield rose six basis points to 2.47 percent.

Bond yields rose as traders in the federal funds market priced in a 100 percent probability of a Federal Reserve rate hike on 14 December.

Adding to pressure on bonds were reports on Friday showing that inflation was picking up around the world.

The Bank of England reported that UK consumers’ inflation expectations jumped to 2.8 percent in November, the highest in more than two years, from 2.2 percent in August.

The National Bureau of Statistics reported that China's producer prices rose 3.3 percent in November from the previous year, the fastest rate of increase in five years.

"China has entered a new inflationary cycle," Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group in Hong Kong, told Bloomberg News. "The next move of the PBOC should be an interest rate hike, not a cut."

Markets rise as ECB extends asset purchases

Markets rose on Thursday.

The S&P 500 rose 0.2 percent to a new record high, the STOXX Europe 600 jumped 1.2 percent and the Nikkei 225 and Shanghai Composite both rose 0.7 percent.

West Texas Intermediate crude jumped 2.2 percent and US 10-year Treasury yields rose seven basis points to 2.41 percent.

The European Central Bank sent mixed signals at its monetary policy meeting on Thursday.

The ECB announced that its asset-buying programme will be extended from March next year to the end of 2017 but at a reduced pace of 60 billion euros from April from the current 80 billion euros.

Despite the reduced pace of buying, ECB President Mario Draghi told a press conference that there "is no question about tapering".

The ECB also added that if "the outlook becomes less favorable or if financial conditions become inconsistent with further progress towards a sustained adjustment of the path of inflation", then it would increase the programme again in terms of size and/or duration.

Markets rise amid strong risk appetite

Markets rose on Wednesday.

The S&P 500 jumped 1.3 percent to an all-time high while the STOXX Europe 600 rose 0.9 percent.

Earlier on Wednesday, Asian stocks also rose. Both the Nikkei 225 and Shanghai Composite Index rose 0.7 percent.

Government bonds also rose on Wednesday. US 10-year Treasury yields fell five basis points to 2.35 percent and Germany's 10-year bond yields fell three basis points to 0.35 percent.

“Appetite for riskier assets is strong amid investors and nothing is stopping them from beefing up their bullish bets,” said Naeem Aslam, chief market analyst in London at Think Markets UK Ltd.

However, oil prices fell. West Texas Intermediate crude fell 2.3 percent amid speculation increased that production by US shale producers will counter output cuts from OPEC.

Markets rise, Dow breaks record again

Markets rose on Tuesday.

The S&P 500 rose 0.3 percent. The Dow Jones Industrial Average rose 0.2 percent to finish at an all-time high for the second consecutive day.

The STOXX Europe 600 rose 1.0 percent as Italy's FTSE MIB surged 4.2 percent.

Earlier in Asia, the Nikkei 225 rose 0.5 percent while the Hang Seng rose 0.8 percent.

The focus is “back to reflation and it’s back to assessing 2017”, said Chris Weston, chief market strategist at IG.

Stocks shrug off Italian political uncertainty, surge may be around the corner

Markets were mostly higher at the start of the week despite political uncertainty in Italy.

Italian Prime Minister Matteo Renzi resigned on Monday after losing a referendum he had called to push through constitutional changes.

Asian markets fell on the news. The Nikkei 225 fell 0.8 percent and the Shanghai Composite tumbled 1.2 percent.

However, European markets closed higher. The STOXX Europe 600 rose 0.6 percent.

In the US, the S&P 500 rose 0.6 percent.

However, Peter Cardillo, chief market economist at First Standard Financial, warned that this was just "the calm before the storm" while Claus Vistesen, chief euro zone economist at Pantheon Macro, wrote in a note: "The economy could easily grind to a halt due to political uncertainty."

Still, some analysts think that the stock market rally has at least a bit more to run.

Jeffrey Saut, the chief investment strategist at Raymond James, wrote on Monday that after a pause last week, the S&P 500 has entered the final surge of a buying climax.

Also on Monday, Todd Gordon of TradingAnalysis.com said on CNBC that another big surge for the small caps is around the corner.

S&P 500 valuation stretched but may be sustainable

The S&P 500 fell 1 percent last week, its first weekly drop sine the US presidential election.

The pause in the US stock market rally last week came as USA Today reported that market valuations have become stretched.

“Since Election Day, the price-to-earnings (P-E) ratio, a common metric used to measure whether stocks are cheap or overvalued, have swelled further to 17.1 times earnings from 16.2 times, which is well above the long-term average of 15.3 over the past 30 years, according to Thomson Reuters,” wrote Adam Shell in the report.

“The market is pricing in great expectations,” says David Kotok, chief investment officer at Cumberland Advisors. “There is little margin for disappointment.”

However, other analysts remain sanguine.

“When there is a quantum shift in growth expectations, the arithmetic of P-E multiples fails to capture the value in stocks,” argues Don Luskin, chief investment officer at TrendMacro.

Jim Paulsen says the stock market’s current valuation is “not excessive” and that “a P-E of about 17 is probably a sustainable multiple for the overall market”.

S&P 500 flat despite positive jobs number

Markets were mostly lower on Friday.

In the US, the S&P 500 was flat but the Dow Jones Industrial Average fell 0.1 percent.

European stocks fell, with the CAC 40 in particular falling 0.7 percent and the FTSE 100 falling 0.3 percent.

In Asia, the Nikkei 225 fell 0.5 percent while the Hang Seng slumped 1.4 percent.

The US employment report on Friday showing an increase of 178,000 jobs in November had little impact on markets. While the headline number was positive, the report also showed fewer people looked for work and hourly wages fell.

Indeed, bond prices rose. The yield on the US 10-year Treasury note fell to 2.39 percent from 2.45 percent on Thursday.

Oil continued to rally. US crude rose 1.2 percent while Brent rose 1 percent.

Markets mixed but oil rises again

Markets were mixed on Thursday.

The Dow Jones Industrial Average rose 0.36 percent to another record high but the S&P 500 fell 0.35 percent.

The STOXX Europe 600 fell 0.3 percent but the MSCI Asia Pacific Index rose 0.6 percent.

Oil rose again on Thursday. Brent crude surged more than 4 percent while West Texas Intermediate jumped 3.3 percent.

Gene McGillian, manager of market research for Tradition Energy, sees WTI crude "reaching the 2016 highs near $52 and even pushing above that" while Goldman Sachs forecast an increase in prices to $55 for WTI and $56.50 for Brent.

Markets mixed, oil surges after deal on output cut

Markets were mixed on Wednesday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 was flat.

Crude oil surged after the Organization of the Petroleum Exporting Countries agreed to cut production levels. West Texas Intermediate crude jumped 9.3 percent while Brent rose 8.8 percent.

Michael Matousek, head trader at US Global Investors Inc., said: “The deal is taking people by surprise, so they’re desperately buying futures now.”

However, Stuart Samuels, a London-based sales trader at Oppenheimer Europe, said that while oil had driven pushed European stocks up on Wednesday, “I’d be inclined to take some profits” with Sunday’s Italian referendum on constitutional reform looming.

Stocks rise, US market "pricey" but "bullish"

Stocks mostly returned to winning ways on Tuesday.

The S&P 500 rose 0.1 percent, the STOXX Europe 600 rose 0.3 percent and the Shanghai Composite Index rose 0.2 percent. However, the Nikkei 225 fell 0.3 percent.

Further gains could be hampered by high valuations, especially for US stocks.

"I'm a little concerned that we're getting a little pricey, a little rich," Erin Gibbs, equity chief investment officer at S&P Global, told CNBC on Monday.

Nevertheless, Ari Wald, head of technical analysis at Oppenheimer, told CNBC on Monday that "the longer-term trend here is bullish for the S&P 500".

David Kelly, chief global strategist at JPMorgan Asset Management, agrees.

"So long as rates move up slowly, the Fed raises rates slowly, the bull market continues on," he said at a media briefing on Tuesday.

US and European stocks fall but Japanese stocks gaining favour

Markets mostly fell on Monday.

At the start of the day, Asian stocks rose, with the MSCI Asia Pacific Index rising 0.8 percent.

However, European stocks failed to follow through, with the STOXX Europe 600 declining 0.8 percent.

US stocks also fell. The S&P 500 declined 0.5 percent.

The fall in the US stock market ended a four-day winning streak and comes as analysts warn that valuations may be getting stretched.

John Reese, co-founder at Validea Capital Management, is one of those who think that US stocks may be overvalued.

In a CNBC article, Reese wrote that the current market cap/GDP ratio of nearly 125 percent is “the highest it has been...since the market went over a cliff in 2000”.

Indeed, some analysts now think that Japan's stock market may be a better bet.

“Japan is now our top pick in global equity regions, replacing the U.S.,” Jonathan Garner, Morgan Stanley's chief Asia and emerging market equity strategist, said in a note on Sunday.

S&P 500 at record high but prospective returns over the long term look “paltry”

US stocks ended at a record high last week.

The S&P 500 rose 1.4 percent over the week to end at a record high of 2,213.33. The index has now risen for three consecutive weeks.

However, Wayne Kaufman, chief market analyst at Phoenix Financial Services, said that the following week “could see some softness”.

“The three indicators I look at—market breadth, sentiment, and valuation—are all in areas where the market typically runs into some headwinds,” Kaufman said. “Investors are hopeful that valuations are justified given the incoming administration.”

However, John Coumarianos thinks that US stock valuations are suggesting that returns over the next decade are likely to be “paltry”.

“A 5% real annualized return from the S&P 500 may not be impossible, but it’s highly improbable from the market’s current Shiller valuation of 26,” he wrote. “The long term average is 16.”

Coumarianos wrote that Research Affiliates has projected future 10-year annualised real returns for the S&P 500 and the Barclays US Aggregate at 1.1 percent and 0.50 percent respectively.

John Hussman also has low expectations for US stock returns. In his latest article, Hussman wrote that the US stock market is “at a level consistent with expectations of S&P 500 12-year nominal total returns averaging less than 1% annually.”

Hussman thinks that the recent marginal highs are more consistent with a “blowoff” than a “breakout” and expects “the S&P 500 to surrender its entire total return since 2000 over the completion of the current market cycle”.

US stocks hit record high as money flows out of bonds, real estate and gold

Stocks rose on Friday.

The S&P 500 rose 0.4 percent to hit another all-time high. The STOXX Europe 600 rose 0.2 percent while the Nikkei 225 rose 0.6 percent.

“Nothing is stopping the market at this point,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners.

However, other markets did not do so well on Friday.

US Treasuries fell. The yield on the 10-year note rose to 2.359 percent, the highest close since July 2015, from 2.355 percent on Wednesday.

Oil fell, with US light sweet crude tumbling 4 percent.

According to fund-tracker EPFR Global, money flowed out of government bonds, US real estate and gold funds and into the US equity market in the most recent week.

Markets mixed amid uncertainty outside US

Markets were mixed on Thursday.

While US financial markets were closed for a holiday, the STOXX Europe 600 rose 0.3 percent and the yield on the 10-year German government bond fell to 0.259 percent from 0.277 percent on Wednesday.

In Asia, the Nikkei 225 rose 0.9 percent but the Hang Seng Index fell 0.3 percent and the KOSPI fell 0.8 percent.

“Uncertainty for the rest of the world outside the U.S. is still hanging high,” said Ameet Patel, analyst at Northern Trust Capital Markets.

“As money is sucked into U.S. stocks, we’ve seen a big selloff in many emerging market currencies and many emerging market assets,” said Jane Foley, currency strategist at Rabobank.

Markets mixed but some enjoying bull runs

Markets were mixed on Wednesday.

The S&P 500 eked out a 0.1 percent gain to finish at another record high but the STOXX Europe 600 slipped less than 0.1 percent.

In Asia, while Japan's stock market was closed for a holiday, the Shanghai Composite Index fell 0.2 percent but Australia's S&P/ASX 200 jumped 1.3 percent.

Yields on the US 10-year Treasury note rose to 2.355 percent from 2.319 percent on Tuesday.

“This is relief,” said Shannon Saccocia, head of asset allocation at Boston Private Wealth. “We have positive earnings posted, an energy market which has stabilized, and we’ll have fiscal spending that will benefit parts of the market that have lagged.”

And it is not just the US stock market that has gained. CNN noted that many markets around the world have surged by 20 percent or more from recent 2016 lows, with some up more than 30 percent.

Dow 50,000?

Markets rose on Tuesday.

The MSCI All Country World Index rose 0.3 percent. The S&P 500 rose 0.2 percent to another all-time high. The STOXX Europe 600 also rose 0.2 percent.

Tim Knight at Slope of Hope calls the latest rally in stocks The Persistent Ascent.

“I don’t see what’s going to slow this down at any point,” he wrote. “Dow 50,000, here we come.”

US stocks hit all-time highs on hopes of Trump boost to economy

Markets rose on Monday.

The S&P 500 rose 0.8 percent to an all-time high, the STOXX Europe 600 rose 0.3 percent and the MSCI Emerging Market Index rose 0.3 percent.

Oil surged. West Texas Intermediate crude rose 3.9 percent while Brent jumped 4.4 percent.

Bonds rose. The US 10-year Treasury yield fell four basis points to 2.32 percent.

“There’s optimism that it’s more likely that Trump is going to put us on an economic fast track versus Clinton,” said Terry Morris, managing director of equities at BB&T Institutional Investment Advisors.

However, JPMorgan Chase & Co. is doubtful that president-elect's fiscal plan will have the expected impact.

Michael Feroli, US economist at the bank, wrote on Friday that the “majority of the stimulus is expected to come through tax cuts and, relative to our prior forecast, should boost annualized GDP growth by about 0.25 percentage-point in the second half of 2017 and 2018, leaving the level of GDP about 0.4 percentage points higher at the end of 2018”.

Dow near record high, Nikkei in bull run

Major stock markets have been in rally mode in recent weeks.

The Dow Jones Industrial Average hit a record high of 18,923.06 last Tuesday. Although it pulled back later in the week, it was up 0.1 percent for the week.

Also doing well recently is the Nikkei 225. After declining 18 percent in the first half of the year, the index has risen more than 20 percent from its June low.

Some analysts think that the Nikkei 225's bull run is not over yet.

“A lot of things are lining up for Japanese equities,” said Bryan Goh, chief investment officer of Bordier & Cie. “It looks like the economy is stabilizing and the weak currency is certainly helping. There’s some momentum behind this bull run.”

Naoki Murakami, a market strategist at AllianceBernstein, said that Donald Trump's victory in the US election “is a very big regime change in U.S. economic policy that could be a game-changer for the yen and the Japanese stock market”.

Markets mixed, bonds continue to fall

Markets were mixed on Friday.

The S&P 500 slipped 0.2 percent and the STOXX Europe 600 fell 0.4 percent.

Asian stocks were mixed. The Shanghai Composite Index fell 0.5 percent but the Nikkei 225 rose 0.6 percent.

Oil rose on Friday. Brent crude rose 0.8 percent while West Texas Intermediate crude rose 0.6 percent.

Bonds fell. The US 10-year Treasury yield rose 5.9 basis points to 2.337 percent to complete its largest two-week increase since November 2001.

US stocks rise but bonds fall as Yellen hints of rate hike

Stocks mostly rose on Thursday.

The S&P 500 rose 0.5 percent and the STOXX Europe 600 rose 0.6 percent. However, the Nikkei 225 was flat.

US Treasuries fell. The yield on the 10-year note rose to 2.278 percent from 2.222 percent on Wednesday after Federal Reserve Chair Janet Yellen told a congressional hearing that an increase in interest rates “could well become appropriate relatively soon”.

Yellen added that the “risk of falling behind the curve in the near future appears limited” and that future rate increases will be “gradual”.

Not everyone agrees with her.

Deutsche Bank chief economist Joe LaVorgna told CNBC on Thursday that Trump will give the economy a lot of fiscal stimulus and that could put the Fed “in a really, really tough spot”.

Markets mixed amid US policy uncertainty

Markets were mixed on Wednesday.

Both the S&P 500 and STOXX Europe 600 fell 0.2 percent.

However, the Nikkei 225 jumped 1.1 percent earlier in the day.

Oil fell but bonds rose.

Annika Eiremo, a fund manager at Janus Capital Group Inc., thinks that “rates have room to go higher” and that it is “still early stages of a very uncertain time period in terms of what policy will be”.

Markets rise as bonds rebound

Markets rose on Tuesday.

The S&P 500 rose 0.8 percent and the STOXX Europe 600 rose 0.3 percent.

Bonds rebounded. The US 10-year Treasury yield fell three basis points to 2.23 percent while Italy's 10-year yield fell 12 basis points to 1.96 percent.

Oil rose, with US crude surging 5.8 percent.

Brian Jacobsen, the chief portfolio strategist at Wells Fargo Funds Management, thinks that the market “could be handed off to a Santa Claus Rally”.

However, Jeffrey Gundlach, co-founder of DoubleLine Capital, said the stock market is in for a “bumpy ride” as expectations are dashed that President-Elect Donald Trump can quickly spur growth.

“The Trump win is not positive for consumer spending,” he said on Tuesday.

Gundlach also thinks that Trump's plans for the US economy are “bond unfriendly”, although he did recommend investors buy Treasuries on dips.

Bonds and emerging markets fall

Bonds and emerging markets fell on Monday.

US 10-year Treasury yields increased eight basis points to 2.24 percent. German, UK and Italian bonds also fell.

The MSCI Emerging Markets Index fell 1.1 percent.

However, the S&P 500 was little-changed while the STOXX Europe 600 rose 0.2 percent.

“Trump has introduced so much uncertainty -- around the fiscal outlook, the outlook for foreign demand for Treasuries given his protectionism and his views on China, uncertainty around the outlook for the Fed,” said John Davies, an interest-rate strategist at Standard Chartered.

US earnings recession over

The Wall Street Journal reports that the US earnings recession is over.

With more than 90% of S&P 500 companies having reported results for the latest quarter, earnings for the biggest U.S. companies are finally growing again. Third-quarter adjusted earnings are projected to increase 2.9% from the same period a year ago, according to FactSet. That marks the first year-over-year growth rate after five consecutive quarters of contractions.

The WSJ further reports that earnings growth this quarter is expected to improve to 3.5 percent followed by 11.4 percent and 10.5 percent in the first two quarters of 2017.

In another report, Bloomberg notes that among the nine instances since 1936 when companies emerged from an extended streak of profit declines, stocks posted gains in all but two, with the S&P 500 rising an average 12 percent over the following year.

On the other hand, Bloomberg does point out that the economy is "already showing signs of wobbling" while the WSJ points out that with stocks already near records, "there is no guarantee companies will be rewarded by investors" even if earnings keep rising.

Markets mixed, US stock market may be close to peak

Markets were mixed on Friday.

The MSCI All-Country World Index fell 0.6 percent as the Emerging Markets Index plunged 2.9 percent.

However, in the US, the Dow Jones Industrial Average rose 0.2 percent to hit a record high even as the S&P 500 slid 0.1 percent.

Technical strategist Tom DeMark predicts that US stocks are on the verge of peaking and then subsequently tumbling by as much as 11 percent.

However, Warren Buffett thinks that over the longer term, stocks will continue rising.

Dow hits record high amid mixed markets

Markets were mixed on Thursday.

Asian stocks rose in the wake of the rally in the West the previous day. The Nikkei 225 in particular surged 6.7 percent.

In the US, the Dow Jones Industrial Average rose 1.2 percent to finish at a record high while the S&P 500 edged up 0.2 percent but the Nasdaq Composite fell 0.8 percent.

European stocks fell after rallying earlier in the day. The STOXX Europe 600 finished 0.3 percent lower.

Michael Reilly, chief investment officer for equities at TCW, said that “the market is expecting an emphasis on fiscal spending initiatives to jump-start the economy”.

However, Bruce McCain, chief investment strategist at Key Private Bank, warned that “as we get into the coming days and weeks, we’ll need to rethink a lot of our initial reactions” as there “are a lot of things we don’t know”.

Markets rise on Trump victory

Markets rose on Wednesday after a surprise victory by Donald Trump in the US presidential election.

The S&P 500 rose 1.1 percent while the STOXX Europe 600 rose 1.5 percent.

However, the MSCI Emerging Markets Index fell 2.5 percent as Mexican and Brazilian shares sank.

The US 10-year Treasury yield jumped 22 basis points to 2.07 percent.

Markets rise as Americans vote

Markets rose on Tuesday as Americans went to vote.

The S&P 500 rose 0.4 percent while the STOXX Europe 600 rose 0.3 percent.

Safe haven assets declined. US 10-year notes fell and yields rose three basis points to 1.86 percent while gold fell 0.4 percent.

Earlier on Tuesday, Asian stocks mostly shrugged off a report that China's exports fell for a seventh consecutive month in October.

The Shanghai Composite Index rose 0.5 percent but the Nikkei 225 finished flat.

Markets rise after FBI clears Clinton

Markets rose on Monday following the FBI's announcement on Sunday that Democratic presidential candidate Hillary Clinton's handling of e-mails was not a crime.

The S&P 500 jumped 2.2 percent and the STOXX Europe 600 rose 1.5 percent.

Earlier in the day, Asian stocks had been the first to react. The Nikkei 225 jumped 1.6 percent while the Shanghai Composite rose 0.3 percent.

Oil rose, with West Texas Intermediate crude rising 1.9 percent and Brent rising 1.3 percent.

Safe haven assets fell. US 10-year Treasury yields rose five basis points to 1.82 percent.

FBI clears Clinton but US election still poses risks for stock market

The FBI said on Sunday it stood by its earlier finding that no criminal charges were warranted against Democrat Hillary Clinton for using a private email server for government work.

This should allow Clinton to coast towards victory in the presidential election on Tuesday. The latest Reuters/Ipsos poll shows Clinton with a 5 percentage point lead over her rival, Republican candidate Donald Trump, while the Reuters/Ipsos States of the Nation project estimates that Clinton has a 90 percent chance of winning the election.

Still, with the uncertainty surrounding the US elections coupled with the weak global economic climate, former IMF chief economist Simon Johnson thinks that the stock market is at risk of a crash.

[G]rowth and employment around the world look fragile. A big adverse surprise – like the election of Donald Trump in the US – would likely cause the stock market to crash and plunge the world into recession.

Meanwhile, William Watts at MarketWatch thinks there is a risk for stocks even if Hillary Clinton wins.

Investors may have qualms about the prospect of a Donald Trump presidency, but the biggest near-term threat to stocks is posed by the outside possibility that neither he nor Hillary Clinton emerges a clear winner on Tuesday.

US stocks fall for ninth day

Markets fell on Friday.

The S&P 500 fell 0.2 percent to extend its decline to nine consecutive days, its longest slide since 1980.

US 10-year Treasury yields fell four basis points to 1.78 percent.

Oil fell. US crude fell 1.3 percent and Brent fell 1.7 percent.

A report showing that US payrolls rose 161,000 last month failed to sustainably boost stocks.

Dennis Debusschere, a senior managing director and global portfolio strategist at Evercore ISI, said: “All expectations of the rate outlook and by extension the markets are being muted by election uncertainty.”

S&P 500 falls again

Markets mostly fell on Thursday.

The S&P 500 fell 0.4 percent, an eighth consecutive decline that is its longest run of losses since 2008.

The US dollar fell against the euro and the yen while the British pound jumped 1.3 percent against the US dollar after the Bank of England said it is no longer expecting to cut interest rates this year.

The US 10-year Treasury yield rose one basis point to 1.81 percent.

Oil fell. West Texas Intermediate crude fell 1.5 percent while Brent declined 1.1 percent.

Markets fall as Fed sees strengthened case for rate hike

Markets fell on Wednesday.

The S&P 500 fell 0.7 percent, the STOXX Europe 600 fell 1.1 percent and the Nikkei 225 fell 1.8 percent.

Oil fell, with US crude declining 2.8 percent.

The yield on the US 10-year Treasury note fell to 1.799 percent from 1.822 percent on Tuesday.

The Federal Reserve left interest rates unchanged as expected on Wednesday but said that “the case for an increase in the federal funds rate has continued to strengthen”.

“This is as close as you can get to a data-dependent Fed saying they are most likely to go in December,” said Brent Schutte, chief investment strategist of Northwestern Mutual Life Insurance Co.’s wealth-management unit.

After the Fed decision, the probability traders are assigning to a rate hike rose to 78 percent from 68 percent on Tuesday, according to data compiled by Bloomberg.

Investors shift to safe assets as BoJ leaves policy unchanged, US election nears

Stocks mostly fell on Tuesday.

The S&P 500 fell 0.7 percent and the STOXX Europe 600 fell 1.1 percent.

The Nikkei 225 edged up 0.1 percent though after the Bank of Japan left its monetary policy unchanged.

Safe haven assets rose. The yield on the US 10-year Treasury note fell to 1.822 percent from 1.834 percent on Monday. Gold rose 1.2 percent.

“As we move closer to the election, people start getting more and more jittery,” said Mohit Bajaj, director of exchange-traded fund trading solutions at WallachBeth Capital.

Indeed, CNBC reports that during presidential election years, the S&P 500 rises 56 percent of the time in November for an overall average gain of about half a percent. In non-presidential election years, the S&P 500 rises three-fourths of the time for an average gain of 1.7 percent.

Markets fall ahead of US elections

Markets mostly fell on Monday.

The S&P 500 was flat but the Dow Jones Industrial Average fell 0.1 percent. The S&P 500 was down 1.9 percent for the whole of October, its worst performance since January.

Elsewhere, the STOXX Europe 600 fell 0.5 percent and the Nikkei 225 fell 0.1 percent.

US crude oil fell 3.8 percent, its biggest decline since 23 September.

The yield on the US 10-year Treasury note fell to 1.834 percent from 1.847 percent on Friday.

CNBC reports that stocks could continue to trade hesitantly ahead of the US elections.

Julian Emanuel, equity and derivative strategist at UBS, reportedly said: "When the election is as contentious as this one has been with so much back and forth, and the prevalence of the third-party candidate, what our work has shown is the market has tended to trade very indecisively the month before and several months after."

BoJ meets as industrial output and retail sales stall

With markets widely considered to be still reliant on central bank stimulus for support, the Bank of Japan's two-day meeting starting today will be closely-watched.

Japan reported today that industrial production and retail sales in September were unchanged from the previous month.

Compared to a year ago, industrial output rose 0.9 percent in September but retail sales fell 1.9 percent.

Toru Suehiro, senior market economist at Mizuho Securities, said: "Looking at the production report, I think GDP will lack strength and post a small gain, which would increase calls for stimulus measures to boost growth.”

Stocks fall but entering historically bullish period

Stocks mostly fell on Friday.

The S&P 500 fell 0.3 percent after news that the Federal Bureau of Investigation was reviewing new evidence on Democratic presidential candidate Hillary Clinton’s email server. US stocks fell despite a report earlier on Friday showing that the economy grew at an annual rate of 2.9 percent in the third quarter.

The STOXX Europe 600 also fell 0.3 percent but the Nikkei 225 rose 0.6 percent.

Bonds were relatively stable after two days of sharp declines. Nevertheless, the US 10-year Treasury yield edged up to 1.847 percent, its highest since 27 May.

While October closed on a weak note for stocks, next week starts a new trading month, one which has historically kicked off the best six-month period for stocks. According to Adam Shell at USA Today, the Dow Jones industrial average has posted average gains of 7.4 percent in the November-through-April period compared to a 0.4 percent return May-through-October.

“The seasonally bullish pattern has a better-than-average chance of playing out this year,” Doug Ramsey, chief investment officer at Leuthold Group, was quoted as saying.

In contrast, David Santschi, CEO of TrimTabs Investment Research, is positioning his firm’s model stock portfolio “defensively”, saying that there are “plenty of cautionary signs”.

Indeed, recently, Bloomberg posted several charts that supposedly scare Wall Street.

Global bonds fall after UK growth better than expected

Global bond markets fell on Thursday.

The US 10-year Treasury yield rose six basis points to 1.85 percent, pushing the S&P 500 down 0.3 percent.

European bonds also fell, with the UK 10-year gilt yield rising 10 basis points to 1.27 percent, the highest since the Brexit vote in June, after a report showed that the economy grew 0.5 percent in the July-September period, better than the forecast 0.3 percent.

According to Gary Pollack, a head of fixed-income trading at Deutsche Bank, the sell-off in bonds was the result of “a combination of better economic growth and changing expectations for monetary policies going forward”.

Oil rose though. West Texas Intermediate and Brent crude both rose about one percent.

Markets fall as earnings growth seen key

Markets mostly fell on Wednesday.

The S&P 500 fell 0.2 percent and the STOXX Europe 600 fell 0.4 percent.

The Nikkei 225 bucked the trend though, rising 0.2 percent.

US crude oil fell 1.6 percent to a three-week low.

Bonds also fell. The US 10-year Treasury yield rose to 1.790 percent from 1.758 percent on Tuesday.

On the US corporate earnings front, Apple fell 2.2 percent but Boeing jumped 4.7 percent after providing contrasting earnings reports.

“Earnings growth is going to be really, really key for continued growth in the market, even though we’ve muddled along without that for a while,” said Karyn Cavanaugh, senior market strategist at Voya Investment Management.

US and European stocks fall but have room to rise

Markets were mixed on Tuesday.

The S&P 500 fell 0.4 percent and the STOXX Europe 600 fell 0.3 percent but the Nikkei 225 rose 0.8 percent.

Despite the weak performance of US and European stocks on Tuesday, some see opportunity in them.

Ed Yardeni of Yardeni Research said in a note on Tuesday that while the overall stock market looks fully valued, "there may be room for stock multiples to expand further, especially for beaten-up sectors like financials and health care".

Richard Barley at The Wall Street Journal wrote that after lagging other markets for most of 2016, European stocks are now looking relatively attractive in value. He said that the STOXX Europe 600 excluding the UK trades on 14.7 times the next 12 months’ earnings compared to 16.6 times for the S&P 500.

Markets mixed but analysts see positive signs for stocks

Markets were mixed on Monday.

The S&P 500 rose 0.5 percent, the Nikkei 225 rose 0.3 percent while the Shanghai Composite Index jumped 1.2 percent.

The STOXX Europe 600 fell less than 0.1 percent, with the IBEX 35 propping the continent's stocks by rising 1.3 percent.

US bonds fell, with the yield on the 10-year Treasury note rising to 1.763 percent from 1.740 percent on Friday.

US stocks were boosted by some better-than-expected earnings.

“Both sales and earnings have been positive so far,” said Michael Arone, chief investment strategist at State Street Global Advisors. “This quarter has the potential to end the earnings recession.”

Indeed, an end to the earnings recession, an active mergers and acquisitions market and the largest initial public offering of the year happening this week “are essentially bullish signs for the market,” said Randy Frederick, director of trading and derivatives at Charles Schwab, according to a CNBC report.

US stocks to get boost from return to earnings growth

Reuters reports that US corporate earnings are turning positive after four consecutive quarters of contraction and that could provide a second wind for stocks.

[S]tronger-than-expected profit reports from companies such as Microsoft and Bank of America have turned the tide and the blended earnings growth estimate for the third quarter sits now at 1.1 percent. This would effectively end the earnings recession...

"With the earnings recession showing signs of ending this quarter, the economy is on firmer footing, which could lead to your typical end of year strength," said LPL's senior market strategist Ryan Detrick.

Stocks flat but earnings may be turning higher

Stocks were flat on Friday.

Both the S&P 500 and STOXX Europe 600 were little changed while in Asia, the Shanghai Composite Index rose 0.2 percent but the Nikkei 225 fell 0.3 percent.

Microsoft broke above its record high hit during the technology boom in 1999 after reporting results on Thursday that beat analyst forecasts.

Indeed, Jack Caffrey of JPMorgan Private Bank told CNBC that after more than a year of back-to-back quarters of earnings declines for stocks, the picture is "finally turning higher" and that stocks will soon reap the benefits of earnings momentum.

Markets fall, may already be in bear market

Markets were mostly down on Thursday.

Stocks fell. The MSCI All-Country World Index fell 0.1 percent, dragged down by a 0.1 percent decline in the S&P 500.

The euro fell 0.4 percent against the US dollar after President Mario Draghi said the European Central Bank has not discussed extending or tapering its bond-buying programme.

Germany's 10-year bund yield fell three basis points to 0.003 percent while the US 10-year Treasury yield rose one basis point to 1.75 percent.

Oil fell. West Texas Intermediate crude declined 2.3 percent.

As the rally in stocks halted, technical analyst Rich Ross of Evercore ISI told CNBC that “we may actually have entered the early stages of a bear market”.

In contrast, Dennis Davitt of Harvest Volatility Management said that “if earnings continue to be good, we're going to see the macro market accelerate to the upside”.

Markets rise as oil hits highest level in over a year

Markets rose on Wednesday.

The S&P 500 rose 0.2 percent while the STOXX Europe 600 rose 0.3 percent.

US light sweet crude rose 2.6 percent, reaching its highest level since July 2015.

The rise in oil helped the energy sector in the S&P to lead gains in the US, rising 1.4 percent.

Earlier in Asia, the Nikkei 225 rose 0.2 percent but the Shanghai Composite was flat and the Hang Seng fell 0.4 percent after China reported that its economy grew 6.7 percent in the third quarter.

Markets rise as higher US inflation mitigated by lower core reading

Markets rose on Tuesday.

The MSCI All-Country World Index rose 0.9 percent. The S&P 500 rose 0.6 percent while the STOXX Europe 600 jumped 1.5 percent.

US Treasuries rose. The 10-year note yield fell three basis points to 1.74 percent after a report showed weaker-than-expected US core inflation reading in September.

Charles Comiskey, head of Treasury trading in New York at Bank of Nova Scotia, said: “The lower inflation report pushed the Fed back a little bit.”

However, the inflation report also showed that the headline consumer price index rose 1.5 percent year-on-year, the most since October 2014.

The overall inflation trend appears to be confirming expectations.

The latest monthly survey of fund managers by Bank of America Merrill Lynch showed that inflation expectations are at a 16-month high, while stagflation fears have reached their highest level since April 2013.

And with fund managers also worried about an EU breakup, a bond crash and Republicans winning the White House, it is little wonder then that their cash balances rose to 5.8 percent of their portfolios in October, up from 5.5 percent last month and approaching levels not seen since November 2001.

Markets fall as Fed mulls hot economy

Markets mostly fell on Monday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 fell 0.7 percent.

In Asia, the Shanghai Composite Index fell 0.7 percent but the Nikkei 225 rose 0.3 percent.

The yield on the US 10-year Treasury note initially rose to 1.814 percent, its highest since early June, before retreating to 1.766 percent.

The Federal Reserve continued to influence markets on Monday, with Vice Chairman Stanley Fischer warning of risk in running a high-pressure economy, something suggested by Chair Janet Yellen last week as plausible.

Stocks at risk from peak in globalisation

The Wall Street Journal reports that slowing world trade growth and moves toward protectionism pose risks for stocks.

U.S. equity prices have been supported for the past three decades by an acceleration of global trade and a freer flow of capital. Those lifted economic growth and allowed companies to take advantage of new markets and economies of scale. The S&P 500 is up nearly ninefold since October 1986, according to FactSet.

But now there is worry that the party is ending. “We believe globalization has probably reached its peak,” said Marino Valensise, head of the multiasset team at Barings, a member of the MassMutual Financial Group with $275 billion in assets under management. “The market won’t like it.”

Earlier this month, a Bloomberg report had highlighted similar views from Bank of America Merrill Lynch.

Some of the hottest trades of the past few years could stage a sharp reversal as global markets face "peaks" in liquidity, free trade, and income inequality.

That's the big-picture call from Bank of America Merrill Lynch, whose analysts argue in a report published Thursday that an apparent fightback against globalization in advanced economies represents a game-changer for global asset-allocation.

Markets rise as bulls remain unshaken

Markets rose on Friday.

The S&P 500 rose less than 0.1 percent but the STOXX Europe 600 jumped 1.3 percent. The Nikkei 225 rose 0.5 percent.

“Earnings season gave us a little boost this morning, but I think there’s a lot of nervousness here,” said Matthew Peron, head of global equity at Northern Trust Asset Management.

Indeed, the S&P 500 fell 1 percent for the week, and Mark DeCambre at MarketWatch said that October is “shaping up to be the ugliest monthly fall since January”.

Still, some bulls remain unshaken. From Bloomberg:

For Thomas Lee of Fundstrat Global Advisors, the latest gyrations are just turbulence on a ride that will leave the market higher by 9 percent come 2017. RBC Capital Markets LLC’s Jonathan Golub and Bank of Montreal’s Brian Belski, with Lee among the bull market’s biggest cheerleaders, say the rocky start to earnings matters little. They’re declaring the longest profit recession since the financial crisis over, clearing the path for equities to rally into the new year.

Markets fall with Chinese exports

Markets fell on Thursday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 fell 0.9 percent and the US 10-year Treasury yield fell three basis points to 1.74 percent on concerns over possible slower global growth after the release of weak Chinese trade data.

A report from China on Thursday showed that exports fell 5.6 percent in September from a year earlier while imports rose 2.2 percent.

Julian Evans-Pritchard, a China economist at Capital Economics, said in a note on Thursday that this “could be an early sign that the recent recovery in economic activity is losing momentum”.

Mainland Chinese markets shrugged off the trade data though. The Shanghai Composite rose 0.09 percent while the Shenzhen composite rose 0.24 percent. However, the Hang Seng Index fell 1.27 percent.

Markets mixed as Fed remains divided on rate hike timing

Markets were mixed on Wednesday.

The S&P 500 rose 0.1 percent, the STOXX Europe 600 fell 0.5 percent and the Nikkei 225 fell 1.1 percent.

The yield on the US 10-year Treasury note rose to 1.778 percent from 1.760 percent on Tuesday.

The British pound rose 0.7 percent against the dollar to $1.2207 after four consecutive days of losses.

US crude oil fell 1.2 percent after the Organization of the Petroleum Exporting Countries said its production rose last month.

The release of the Federal Reserve's minutes from the September monetary policy meeting provided little direction for markets. It noted that several members thought a rate hike was needed “relatively soon” but added that “a reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation”.

Still, Randall Kroszner, an economics professor at the University of Chicago Booth School of Business, told Bloomberg that “a rate hike is very likely by the end of the year”.

Markets fall as expectation of Fed rate hike rises

Markets mostly fell on Tuesday.

The S&P 500 fell 1.2 percent and the STOXX Europe 600 fell 0.5 percent.

US 10-year Treasury yields rose five basis points to 1.76 percent as odds on a Federal Reserve rate hike before the end of the year rose to 67 percent, up seven percentage points from a month ago.

Earlier on Tuesday, Asian markets were mixed.

The Nikkei 225 rose one percent and the Shanghai Composite rose 0.6 percent.

However, the KOSPI fell 1.2 percent, dragged down by an eight percent plunge in Samsung Electronics after the latter halted sales of its Galaxy Note 7 mobile phone, while the Hang Seng fell 1.3 percent, with developers hit by measures in some Chinese cities to cool property prices.

Markets rise, US earnings may be returning to growth

Markets rose on Monday.

The S&P 500 rose 0.5 percent, the STOXX Europe 600 rose 0.7 percent and the Shanghai Composite rose 1.4 percent as Chinese markets reopened after a week-long holiday.

US crude oil jumped 3.1 percent after Russian President Vladimir Putin said he supported international efforts to limit oil output.

Meanwhile, US stocks could see further gains as a major headwind dissipates.

Bloomberg reports that while analysts predict that net income for S&P 500 Index members fell 1.6 percent in the July-September period to extend the earnings recession to 18 months, US companies have exceeded their forecasts by an average margin of 3.6 percentage points in the past five years.

When the latter is taken into account, the third quarter could yet turn out to be a positive one for US corporate earnings growth.

“Among the nine instances when companies emerged out of prolonged sluggishness, stocks posted gains in all but two,” the report said.

US recession risk down but market vulnerable to one

The Federal Reserve has calculated that the US economy has a 12 percent chance of entering a recession in the next 12 months.

That is down from 16 percent in August and the lowest number since 10 percent in February 2015.

However, Bank of America-Merrill Lynch's head of US equity and quantitative strategy Savita Subramanian warned that “we're going to hit a recession sometime in the second half of next year”.

“We are seven years into a full-fledged, all out, central bankers doing everything they can to stimulate demand,” she said. This has made the market fragile. “There are a lot of itchy trigger fingers. There's lot of violent trades that can really roil a fairly complacent environment.”

Markets fall amid sterling volatility

Markets fell on Friday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 fell 0.9 percent and the Nikkei 225 fell 0.2 percent.

A highlight of trading on Friday was sterling volatility.

The pound fell to as low as $1.1819 during early Asian trading but recovered to $1.2435 by late New York trading. That still left it down 1.4 percent against the dollar for the day.

The fall in the UK currency, however, helped the FTSE 100 to a 0.6 percent gain, the only positive performance on Friday among the major stock markets.

US jobless claims fall but economy could "slide into recession"

Markets were mixed on Thursday.

Asia kicked off the day positively with the Nikkei 225 rising 0.5 percent and the Hang Seng up 0.7 percent.

However, the STOXX Europe 600 fell 0.4 percent and the S&P 500 finished flat.

A report on Thursday showed that initial claims for unemployment benefits in the US fell by 5,000 to 249,000 last week, pushing the four-week average down 2,500 to 253,500, the lowest since December 1973.

While the report suggests that the US economy remains resilient, Karyn Cavanaugh, senior market strategist at Voya Financial, thinks that “there is trepidation among investors because of the writing on the wall for a December rate increase”.

On the other hand, some economists think that 2016 could be the worst year of growth since the 2009 recession. CNN reports that Oxford Economics expects the US economy to grow 1.5 percent while Fitch Ratings forecasts a growth rate of just 1.4 percent.

Lindsey Piegza, chief economist at Stifel, thinks that the US will “just slowly slide into recession over the next couple of years”.

IMF concerned that debt level could lead to "unprecedented private deleveraging"

Markets were mixed on Wednesday.

The S&P 500 rose 0.4 percent and the Nikkei 225 rose 0.5 percent but the STOXX Europe 600 fell 0.5 percent.

Helping to boost US stocks was a 2.3 percent rise in US crude futures, a welcome relief for energy stocks, which are expected to report an earnings decline of 67 percent in the third quarter from a year earlier.

Niladri Mukherjee, a strategist at Merrill Lynch Wealth Management, recommended that investors stick with stocks for now, despite the risk of mounting political and policy uncertainties and elevated valuations.

“Broadly speaking, we still expect equities to outperform fixed income as global growth is picking up and earnings revision ratios have improved in recent months,” he said.

However, the International Monetary Fund warned in its Fiscal Monitor report released on Wednesday that global growth could be hampered by high debt levels.

“At 225 percent of world GDP, the global debt of the nonfiancial sector...is currently at an all-time high,” it said. “There are concerns that the sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery.”

Markets mixed as central banks look to wind down stimulus

Markets were mixed on Tuesday.

The S&P 500 fell 0.5 percent but the STOXX Europe 600 and the Nikkei 225 both rose 0.8 percent.

US Treasuries fell, with the yield on the 10-year note rising to 1.683 percent from 1.624 percent on Monday.

“The feeling in the overall market is that the Fed will raise rates sooner rather than later,” said Ted Weisberg, a trader at Seaport Securities.

Adding to concerns of diminishing monetary stimulus is a Bloomberg report that “the European Central Bank will probably gradually wind down bond purchases before the conclusion of quantitative easing, and may do so in steps of 10 billion euros ($11.2 billion) a month, according to euro-zone central-bank officials”.

US stocks fall, vulnerable to rate rise and earnings disappointment

Stocks were mixed on Monday.

The S&P 500 fell 0.3 percent but the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.9 percent.

Despite the weak start to the fourth quarter for US stocks, Paul Eitelman, investment strategist for North America at Russell, said that in the event of a “significant selloff in the United States, we would want to buy that dip because we think the economic fundamentals are OK”, Bloomberg reported.

However, Eitelman also said that a muted outlook for earnings and rate hikes by the Federal Reserve could derail the market. “In our view the risks are asymmetrically skewed toward a more negative outcome,” he said.

Indeed, USA Today reported that Wall Street analysts now see third-quarter earnings shrinking 0.5 percent.

“For stocks to trend to meaningfully higher levels you need to see earnings move appreciably higher,” says Terry Sandven, chief equity strategist at US Bank Wealth Management.

“The market is vulnerable to a surprise rise in rates or a major earnings disappointment,” says Nick Sargen, chief economist at Fort Washington Investment Advisors.

After gain in third quarter, US stocks could go higher still in fourth

US stocks had a good third quarter.

The S&P 500 rose 3.3 percent and now has a gain of 5.5 percent since the start of the year. The technology sector led the gains in the S&P 500 in the third quarter with a rise of 12 percent.

The gain in technology stocks is encouraging to Dan Morgan, portfolio manager at Synovus Trust Co. “It’s people looking for growth,” he said.

David Kelly, chief global strategist at JP Morgan Asset Management noted that cash and bonds are “paying nothing”. He said: “That makes me still an equity bull.”

Dennis Davitt, chief investment officer at Harvest Volatility Management, also expects the stock market to go higher in the fourth quarter, calling it the “pain trade”.

However, weak earnings could prove a drag on stocks.

“We’ve had weak profit growth for a while now, and equity multiples are pretty elevated,” said Ed Campbell, portfolio manager at QMA. “I wouldn’t be surprised to see us pull back a little bit here.”

Max Wolff, chief economist at Manhattan Venture Partners, cited poor earnings growth as a reason the stock market will “run out of steam” before New Year's Eve.

Stocks rebound with Deutsche Bank as risky financials look cheap

Markets were mixed again on Friday.

The S&P 500 rose 0.8 percent but the STOXX Europe 600 was flat and the Nikkei 225 tumbled 1.5 percent.

Markets have been driven by concerns over Deutsche Bank in recent days and it was no different on Friday. The German bank's stock fell 9 percent early in European trading but recovered to end up 6.4 percent after a report suggested that it was near a deal with US officials to reach a settlement related to its dealings in mortgage securities.

“The odds of a large hole in bank balance sheets are pretty minimal at this point,” said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas.

However, Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, said that “the eurozone banking system is still an overriding question”.

David Lebovitz, global market strategist for JPMorgan Asset Management, told CNBC that there “is a lot of headline risk right now” in financials but added that “the one pocket of value that is left is financials”.

Markets mixed amid concern over Deutsche Bank

Markets were mixed on Thursday.

US stocks fell, with the S&P 500 declinig 0.9 percent, but the STOXX Europe 600 was flat after being up earlier in the session.

Oil rose, with West Texas Intermediate oil rising 1.7 percent.

Stocks were hit after Bloomberg News reported that about 10 hedge funds that do business with Deutsche Bank have moved to reduce their financial exposure.

“The Deutsche Bank situation is major,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

Ed Al-Hussainy, senior global interest-rate analyst at Columbia Threadneedle Investments, said that Deutsche Bank’s solvency is not a critical risk yet, but “if it does start to happen, it happens pretty quickly”.

Stocks rise, oil jumps on prospect of production cut

Markets were mostly up on Wednesday.

US energy stocks jumped 4.3 percent to help drive a 0.5 percent rise in the S&P 500. The STOXX Europe 600 rose 0.7 percent.

US crude oil surged 5.3 percent after the Organization of the Petroleum Exporting Countries agreed on the need for a cut in production of crude oil.

“The cut is clearly bullish,” said Mike Wittner, head of oil-market research at Societe Generale SA.

Not everybody agrees.

Ian Taylor, the head of Vitol Group BV, said he “cannot see a good reason for a major increase in the price of oil” since the market remains “way oversupplied”.

While the jump in oil helped boost most stock markets, the Nikkei 225 fell 1.3 percent.

In bond markets, the yield on the US 10-year Treasury note rose to 1.567 percent from 1.556 percent on Tuesday.

Stocks rise, may see increased volatility

Stocks rose on Tuesday.

The MSCI world index rose 0.3 percent. The S&P 500 rose 0.6 percent while the STOXX Europe 600 Index added less than 0.1 percent.

The yield on the US 10-year Treasury note fell three basis points to 1.56 percent.

West Texas Intermediate oil fell 2.7 percent.

Oppenheimer technical analyst Ari Wald thinks that stocks are likely to continue to rise.

"We're not seeing the type of euphoria that you typically see at a major top in the market," Wald said on CNBC on Monday.

In contrast, Kathy Lien, a macro strategist and currency trader at BK Asset Management, told CNBC that there could be "a deeper correction in stocks", including a "Christmas collapse".

In any case, with the approach of October, volatility in the stock market could rise.

A CNBC report noted that October has been a volatile month for stocks during an election year. Since 1992, the CBOE Volatility Index has risen in each of the six presidential-year Octobers, spiking an average 21 percent.

Stocks fall, US corporate earnings expected to decline again in third quarter

Stock markets fell on Monday.

The S&P 500 fell 0.9 percent, the STOXX Europe plunged 1.6 percent and the Nikkei 225 tumbled 1.3 percent.

The declines were led by bank stocks amid concerns Deutsche Bank will need to raise capital following an anticipated legal settlement with the US Justice Department.

US stocks may continue to struggle after the latest poll by FactSet showed that companies in the S&P 500 are now expected to report an earnings decline again in the third quarter, the sixth consecutive quarter of declines.

The energy sector of the S&P 500 had the largest downward earnings revision for the third quarter, with earnings now expected to decline 66 percent, the largest among all sectors.

However, US crude jumped 3.3 percent on Monday, providing investors some hope that earnings may turn around soon.

“The market is anticipating we’re going to see a resumption of earnings growth, and I think that’s the right perspective,” said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas.

US stock market "vulnerable" to higher rates

The US stock market is turning into a bubble, according to one economist.

In a research note last week, Lombard Street Research chief economist Charles Dumas wrote that money and credit growth in the US is encouraging another bubble in stock markets.

"The Fed has put market sentiment before the economy yet again. It is doing U.S. stocks no favors by provoking an unnecessary bubble with its certain subsequent burst," wrote Dumas.

"When the Fed gets real and makes the necessary increases, this market could prove much more vulnerable than is traditional in the early stages of a rate-hike cycle," he added.

Black Swan investor Mark Spitznagel said as much.

In an interview with CNBC the previous week, Spitznagel said that low rates and high valuation add up to a stock market that is "extraordinarily sensitive to changes in rates".

And to emphasise how high market valuation is, John Hussman wrote today that on normalized profit margins, the cyclically-adjusted market P/E would be at 36.

Markets fall, economic indices "rolling over"

Markets fell on Friday.

The S&P 500 fell 0.6 percent, the STOXX Europe 600 fell 0.7 percent and the Nikkei 225 fell 0.3 percent.

US crude oil fell 4 percent.

Some think the decline willl be short-lived.

Peter Tuchman, a floor broker at the New York Stock Exchange for Quattro M Securities, said the decline on Friday was just a breather after “a big move the last two days”.

“Businesses are still growing revenues, expanding margins, improving productivity and raising dividends, and at the end of the day that determines stock prices,” said Doug Foreman, chief investment officer of Kayne Anderson Rudnick Investment Management.

However, Dan Suzuki, Bank of America Merrill Lynch's senior US equity investment strategist, is cautious on stocks. He told CNBC on Friday that indices that track surprises in economic data “have been rolling over pretty hard since” last July.