Markets mixed, Yellen sounds “cautiously hawkish” on monetary policy

Markets were mixed on Tuesday.

The S&P 500 and STOXX Europe 600 were flat

Earlier, Asian markets mostly fell amid lingering concerns over North Korea. The Nikkei 225 fell 0.3 percent.

“The markets are cautious but yet to fully price in a flare up in military conflict,” said Ivan Ip, a stock strategist at UOB Group.

In the US, markets showed little reaction to Federal Reserve chairwoman Janet Yellen's speech to the National Association for Business Economics.

Yellen said in her speech that because of the risk of the labour market overheating and financial instability, “it would be imprudent to keep monetary policy on hold until inflation is back to 2%”.

“The tone of her comments is cautiously hawkish,” said Ward McCarthy, chief financial economist at Jefferies & Co.

Indeed, market expectations for a rate increase in December based on prices in Fed funds futures moved up to 76 percent, according to CME Group’s FedWatch Tool.

Stocks fall, still reasons to stay bullish

The S&P 500 fell 0.2 percent on Monday amid tension over North Korea but Jeff Reaves sees seven reasons to stay bullish on the stock market:

1. Businesses see great earnings

2. Consumer metrics are strong

3. “Fear index” is far from scary

4. Growth-friendly agenda in D.C. (or gridlock)

5. Global resilience

6. Doomsday metrics can be (and often are) wrong

7. Stocks are still the best game in town.

S&P 500 to continue rising — or not

Analysts are divided on the outlook for the US stock market for the rest of 2017.

In an interview with MarketWatch last week, Laszlo Birinyi, president of Birinyi Associates, thinks that the US stock market has more room to run before 2017 is over.

Birinyi explained that “none of the things that concern us about the beginning of a bear market are currently in existence, like exuberance”.

At the same time, he said that there is still plenty of cash around, with “a lot of money looking to make money”.

In contrast, TIAA Investments' Brian Nick sees US stocks ending the year below current levels.

“We are going to see a leveling off in the trajectory of how fast these gains could come — especially given the fact that the price this year of the S&P 500 has grown faster than earnings have grown,” he said.

However, Nick remains optimistic for next year and thinks the S&P 500 will hit 2,600 by the end of 2018.

US stocks shrug off N Korea, in "bubble territory"

Markets were mixed on Friday.

The S&P 500 rose less than 0.1 percent, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 fell 0.3 percent.

Asian markets fell amid continued tension over North Korea but some analysts think that markets will be able to shrug it off as long as there is no military action from either side.

That is not to say that there is nothing for investors to worry about.

Howard Ma, chief investment officer at Meritocracy Capital Partners, thinks that the US stock market is at its fourth most expensive level ever.

"This puts the U.S. stock market smack-dab at the heart of bubble territory,” he said.

Markets mixed amid both optimism and warnings

Markets were mixed on Thursday.

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

Earlier in Asia, the Nikkei 225 rose 0.2 percent but the Shanghai Composite fell 0.2 percent.

“Valuations are getting a little stretched, and it seems like there is some complacency in the markets,” said Wade Balliet, chief investment strategist at Bank of the West.

Indeed, Jeremy Siegel sees more gains for stocks in the remaining days of the year.

“I would say corporate tax reform could add another 10 percent to the market even this year,” said Siegel.

In contrast, Robert Shiller is “warning against complacency” as he sees signs of a possible bear market.

“[T]he US stock market today looks a lot like it did at the peaks before most of the country's 13 previous bear markets,” he wrote.

Markets mixed as Fed announces start of asset unwind

Markets were mixed on Wednesday.

The S&P 500 edged up less than 0.1 percent while the STOXX Europe 600 was flat and Asian stocks were mixed.

The US 10-year Treasury yield rose to 2.27 percent after the Federal Reserve ended its monetary policy meeting by announcing that it would start to shrink its assets in October.

“The unwinding of the balance sheet will dominate markets for at least the next two years and cements our outlook for higher rates,” said Bryce Doty, senior portfolio manager at SIT Investments.

“Even though this is a slow and deliberate and thoughtful unwind plan, it is not without its potential to rattle markets,” said Kristina Hooper, global market strategist at Invesco.

The impending drawdown in Fed assets comes after a renewed surge of optimism among US investors, with the Wells Fargo/Gallup Investor and Retirement Optimism Index rising from +124 in the second quarter to +138 in the third quarter, its highest level since September 2000.

US stocks at new highs as investors await Fed meeting

Markets were mixed on Tuesday.

The S&P 500 edged up 0.1 percent to another record high while the STOXX Europe 600 was flat and Asian markets were mixed.

“With investors still re-evaluating the Federal Reserve’s ability to raise U.S. interest rates in December, attention will be directed towards Janet Yellen and her thoughts on the recent inflation trends in the U.S.,” said Lukman Otunuga, research analyst at FXTM, as the Fed kicked off a two-day monetary policy meeting on Tuesday.

In the meantime, Karyn Cavanaugh, senior market strategist at Voya Financial, said that markets “are paying attention to what they should be paying attention and that is earnings growth”.

Still, with US stocks at all-time highs, Bloomberg reported that “investors holding the priciest ones are starting to get uneasy”.

JC O’Hara, an analyst at FBN Securities Inc., wrote in a note to clients that “there are a few warning signs that have started to appear”.

S&P 500 hits another record high despite overvaluation

Markets rose on Monday.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 rose 0.3 percent and the MSCI Asia Pacific ex-Japan index rose 1.1 percent.

While Monday's gain took the S&P 500 to another record high, Brad McMillan, chief investment officer at Commonwealth Financial Network, told CNBC that the stock market is way overvalued.

“The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,” said McMillan.

However, McMillan does not think a pull-back is imminent.

“Right now, a recession is a good ways away. And that's the engine for bear markets,” said McMillan.

On the other hand, CNBC noted that the S&P 500 has traded lower 70 percent of the time during the last two weeks of September since 1980, suffering an average loss of 1.3 percent.

S&P 500 at record high leaves valuations stretched

Markets rose last week, with the S&P 500 closing above 2,500 for the first time.

In a report highlighting some of the statistics behind the rally, Bloomberg noted that US stocks have not had a 5 percent correction in more than 400 days. In addition, the S&P 500’s 269 percent rally since the 2009 low is the third strongest ever.

However, in the process, US stocks have become expensive. Bloomberg noted that at 19 times forecast earnings, the S&P 500 is trading at the most expensive level since the dot-com era.

A quarterly review by the Bank for International Settlements published on Sunday noted the same.

“Equity market investors used record amounts of margin debt to lever up their investments, even though price/earnings ratios indicated that equity valuations might be stretched by historical standards,” the BIS reported.

The BIS added: “And there were some signs of search for yield in debt markets: issuance volumes in leveraged loan and high-yield bond markets rose while covenant standards eased.”

Markets shrug off N Korean missile launch, “can go a lot higher”

Markets were mixed on Friday.

The S&P 500 rose 0.2 percent and the Nikkei 225 rose 0.5 percent but the STOXX Europe 600 fell 0.3 percent.

Markets largely shrugged off North Korea's launch of a missile over Japan.

Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company, said that investors ignored events in Korea after previous incidents did not produce lasting declines and have “learned to buy on the dips”.

“Valuations are stretched, but I don’t believe we’re in bubble territory. The market can go a lot higher,” added Morris.

European stocks fell after Bank of England dove Gertjan Vlieghe said that “we are approaching the moment when bank rate may need to rise”.

Markets mixed as China data disappoint

Markets were mixed on Thursday.

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

Elsewhere, the STOXX Europe 600 rose 0.1 percent but in Asia, the Nikkei 225 fell 0.3 percent and the Shanghai Composite fell 0.4 percent.

Disappointing economic data out of China held back stocks. Value-added industrial output slowed for a second straight month in August while growth in investments was the slowest in almost 18 years.

The data came even as some analysts see better prospects for Asian and emerging market stocks.

Analysts at Societe General said that Asian stocks have been beating global stocks and that the outperformance has only just begun.

Analysts at Bank of America Merrill Lynch said that emerging market stocks could double in two years and suggest that “a substantial overweight in Asia/EM equities is warranted”.

Markets mixed, US stocks gain despite “very high” valuations

Markets were mixed on Wednesday.

The S&P 500 rose less than 0.1 percent but still closed at another record high.

The STOXX Europe 600 was flat as gains in Germany and France were offset by falls in the UK.

Asian markets were mixed. The Nikkei 225 rose 0.5 percent but most of the other Asian markets fell.

“The U.S. stock market is exhibiting positive short- and long-term momentum, and breadth has expanded enough to lift the S&P 500 to a new all-time high,” said Katie Stockton, chief technical strategist at BTIG Research.

However, Maris Ogg, president at Tower Bridge Advisors, said that markets “are fully valued now, so earnings will need to catch up to prices”.

Indeed, Julian Robertson Jr, founder of Tiger Management, said at the Delivering Alpha conference presented by CNBC and Institutional Investor that stock market valuations are “very high” and that low interest rates “are creating a bubble”.

And another investor at the conference said that the high yield debt market is even more overvalued. Saba Capital's Boaz Weinstein said that for high yield debt, “the reward isn't there” given the risk.

US stocks hit record highs, could rise further on momentum

Markets rose on Tuesday.

In the US, the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all rose 0.3 percent to hit record highs.

Elsewhere, the STOXX Europe 600 rose 0.5 percent and the Nikkei 225 jumped 1.2 percent.

Many analysts expect further upside for stocks.

“Buying begets more buying,” said Quincy Krosby, Prudential Financial chief market strategist.

“Unless we get some different headlines, the path of least resistance is higher,” said Scott Redler, partner with T3Live.com.

However, Paul LaRosa, chief market technician at Maxim Group, said: “Unless I see a big improvement in the breadth of the market, I'm not expecting a broad-based rally to develop.”

Markets rose on Monday as risk appetite returned after Hurricane Irma wreaked less damage in the US than forecast and North Korea refrained from aggravating tensions.

The MSCI All-Country World Index rose 0.8 percent. The S&P 500 rose 1.1 percent to a record high, the STOXX Europe 600 rose 1 percent and the MSCI Emerging Market Index rose 0.7 percent.

Oil rose, with West Texas Intermediate crude rising 1.2 percent.

Bonds fell. The US 10-year Treasury yield rose eight basis points to 2.13 percent, the German 10-year yield rose two basis points to 0.33 percent and the UK 10-year yield rose five basis points to 1.04 percent.

Gold fell 1.1 percent.

Investors worry about Irma and bubbles

While many investors are focused on Hurricane Irma and its potential impact on the stock market, others are concerned about bubbles in asset markets.

From Bloomberg:

From Alan Greenspan and the current Federal Reserve staff to fund managers hoarding cash, people feel queasy about asset prices.

Euro high-yield debt is trading in line with U.S. Treasuries for the first time ever. Tajikistan is selling Eurobonds as yields on the junkiest emerging markets drop below 6 percent. An exchange-traded fund for betting on low volatility has more than doubled in size this year. And let’s not get started on the bitcoin rally.

Asset prices are getting “more bubbly” than in past periods of effervescence, analysts at Bank of America Merrill Lynch warn...

Markets mixed as funds pour into bonds and non-US stocks

Markets were mixed on Friday.

The S&P 500 fell 0.2 percent and the Nikkei 225 fell 0.6 percent. However, the STOXX Europe 600 rose 0.2 percent.

Investors were cautious ahead of a possible missile test by North Korea and Hurricane Irma’s arrival on the Florida coast over the weekend.

However, investors had been showing caution throughout the week. Weekly flows into global mutual funds showed that investors have been putting funds into bonds and gold, according to Bank of America Merrill Lynch research.

For stocks, investors have moved funds to non-US equities, with the past week marking the 11th out of the past 12 weeks of net outflows for US equities.

Markets mixed, bank stocks fall

Markets were mixed on Thursday.

The S&P 500 was flat, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 rose 0.2 percent.

Bank stocks fell in the US and Europe after the ECB left interest rates unchanged on Thursday but Barclays thinks that the time is right to pick up European bank shares.

In a research note published on Wednesday, Barclays wrote that European stocks have the potential to push higher through the end of 2017, and with the euro rising, banks, transports and materials are likely winners while staples and health care are the likely losers.

Markets mixed but stock rally may have “years to run”

Markets were mixed on Wednesday.

The S&P 500 rose 0.3 percent and the STOXX Europe 600 rose 0.1 percent. However, the Nikkei 225 slipped 0.1 percent.

“The same old political uncertainties surrounding North Korea haven’t gone away, but for now traders are becoming immune to all the bluster,” said David Madden, market analyst at CMC Markets, in a note.

Indeed, Carol Pepper, chief executive officer at Pepper International, thinks that stocks have plenty of room to rise.

“I think we are mid-way through the game,” said Pepper. “You could say we have 5, 6 years to run.”

Markets fall but risk-off sentiment remains “at the margin”

Markets fell on Tuesday.

The S&P 500 fell 0.8 percent, the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 fell 0.6 percent.

Ian Winer, head of the equities division at Wedbush Securities, said: “People are getting a little more nervous on the margin—not just the geopolitical stuff—over whether tax reforms and pro-business policies will get done.”

However, National Australia Bank Director of Economics David de Garis noted that risk off sentiment has not become obvious as moves back to safe haven or risk-off currencies “have been very much at the margin”.

Indeed, Oppenheimer analysts now see the “next leg” of the stock market rally ahead and expects “new highs” for the S&P 500 over the coming weeks.

Markets falls after North Korean nuclear test

Markets fell on Monday.

The STOXX Europe 600 fell 0.5 percent and the Nikkei 225 fell 0.9 percent.

The US stock market was closed for a holiday.

Markets fell after North Korea conducted a nuclear test on Sunday.

“While this is the sixth nuclear test, it is the first since Trump took office, so the market will see this as a clear escalation of tensions,” said Chris Weston, chief market strategist at IG Group.

“Unfortunately, there is unlikely to be any end in sight for this current standoff with North Korea, with few options seemingly on the table to demilitarize the regime,” said IG market analyst Josh Mahony in a note.

Are US Treasuries headed higher?

Some traders think that US Treasuries are likely to rise, pushing yields down.

Chad Morganlander, portfolio manager at Washington Crossing Advisors, told CNBC that the 10-year yield could fall below 2 percent over the next four to six months.

He said that economic growth in the US and globally will begin to “modestly decelerate”, which would lead to a depression in yields.

Meanwhile, Todd Gordon, founder of TradingAnalysis.com, told CNBC that there is potential to gain from more upside in a Treasury bond-tracking exchange-traded fund.

He said that while bonds and stocks usually move inversely, the iShares 20+ Year Treasury Bond TLT ETF has been rallying in tandem with the S&P 500-tracking SPY ETF.

“That's telling me that bonds are either moving higher because of coming risk aversion or the Fed is really just behind this market and not going to take their foot off the gas pedal,” he said.

Markets rise as US employment rises less than expected

Markets rose on Friday.

The S&p 500 rose 0.2 percent, the STOXX Europe 600 rose 0.6 percent and the Nikkei 225 rose 0.2 percent.

A report on Friday showed that the US economy added 156,000 jobs in August, less than the 170,000-180,000 expected by economists.

“This report just kind of pushed back every expectation about a rate hike,” said Mike Antonelli, equity sales trader at Robert W. Baird & Co.

Indeed, a CNBC report noted that in the past, when the employment report fell short of expectations by between 20,000 to 30,000 jobs, the Nasdaq tended to lead other indexes higher, gaining an average of almost 1.7 percent for the next month and trading positively 67 percent of the time.

Markets rise on economic momentum

Markets rose on Thursday.

The S&P 500 rose 0.6 percent, the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 rose 0.7 percent.

Cristina Ulang, head of research at First Metro Investment Corp, said that US and China data “support the outlook that the global recovery is gaining ground and the growth is on a strengthening trajectory that will be good for corporate earnings and exporters to these two markets”.

“In an environment where the economy and earnings continue to grow, markets will also climb. Geopolitics shake up markets from time to time, but usually do not have long-lasting impact,” said Arian Vojdani, investment strategist at MV Financial.

Indeed, Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC on Thursday that for investors, “really good economic momentum” in the US and around the globe means that “the trend is still up”.

Markets rise but risks are “stacking up”

Markets rose on Wednesday.

The S&P 500 rose 0.5 percent, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 rose 0.7 percent.

Stocks in the US were boosted by a report showing that the economy grew at a 3 percent rate in the second quarter, faster than the initially-estimated 2.6 percent rate.

However, a Bloomberg report said that risks are “stacking up” for markets.

Citigroup Inc. strategists including Jeremy Hale reportedly cited “worrying developments” that may signal the approach of a correction in stocks while Commerzbank AG has seen growing evidence of bearish sentiment in bond funds.

Still, Warren Buffett thinks that while “stocks aren’t as cheap as they’ve been most of the time”, they are “still very attractive compared to bonds”.

US stocks rise but opportunities look better elsewhere

Markets were mixed on Tuesday.

The S&P 500 rose 0.1 percent but the STOXX Europe 600 fell 1.0 percent and the Nikkei 225 fell 0.5 percent.

European and Asian markets tumbled after North Korea fired a ballistic missile over Japan but US stocks recovered from early losses after President Donald Trump responded that “all options are on the table”, suggesting a measured reaction.

While the US stock market performed best on Tuesday, many analysts think that markets elsewhere offer better prospects.

“The opportunity set is larger overseas, and the current valuation of international equity markets remains attractive in comparison to that of the United States,” wrote Luis Alvarado, an investment strategy analyst at Wells Fargo Investment Institute, last week.

Prospects appear especially strong for emerging markets. Ryan Vlastelica at MarketWatch reported that emerging market stocks have outperformed in 2017, with the iShares MSCI Emerging Markets ETF up more than 27 percent so far this year.

Ryan Detrick, senior market strategist at LPL Financial, said that emerging markets have broken above a “10-year bearish trendline”. He added that the strenth “could continue” amid “a big pickup in corporate earnings” and modest valuations relative to the rest of the world.

Markets mixed, could tumble 7-10 percent

Markets were mixed on Monday.

The S&P 500 rose less than 0.1 percent as investors assessed the impact of Hurricane Harvey after it caused floods in Texas and forced energy facilities to close.

The STOXX Europe 600 fell 0.5 percent as the euro hit its highest level against the US dollar in more than two years.

In Asia, the Shanghai Composite rose 0.9 percent but the Nikkei 225 was flat and markets elsewhere in the region were mixed.

Rob Carnell, head of Asia research at ING, said that there were “no clear policy clues from the Jackson Hole central bakers’ symposium” and this “left investors pondering”.

Indeed, Matt Maley, equity strategist at Miller Tabak, is pondering the possibility of the S&P 500 tumbling by 7 to 10 percent.

According to Maley, “the improvement in fundamentals is already behind us” and that looking forward, “a drop is more likely than a rise”.

US stock market recovers but shows “signs of stress”

The S&P 500 rose 0.7 percent last week after having fallen for the previous two weeks.

Tom Aspray wrote that the “slight improvement in the technical readings last week suggests we might see an end to the correction in the next few weeks”.

Nevertheless, he is “cautious given the lack of strong new bullish signals and negative seasonal bias in late August and in September” as well as the “apparent complacency of many investors and some Wall Street pros”.

Adam Shell wrote that “signs of stress are emerging” in the US stock market.

Among the signs, Shell noted that safe haven investments are in rally mode, smaller companies and transportation companies are performing poorly and strong earnings have been ignored by investors.

Markets mixed, US stocks vulnerable to plunge

Markets were mixed on Friday.

The S&P 500 rose 0.2 percent and the Nikkei 225 rose 0.5 percent but the STOXX Europe 600 slipped 0.1 percent.

Markets reacted little to speeches by Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi at the central bankers' retreat in Jackson Hole, Wyoming as neither offered clues about future monetary policy moves.

Gary Shilling told Business Insider that US stocks are expensive and a shock could send them plunging.

Which is possibly why many investors are fleeing US stocks.

Bank of America Merrill Lynch reported on Thursday that the US stock market has seen outflows for 10 consecutive weeks, the longest streak of outflows since 2004.

Markets mixed as central bankers meet

Markets were mixed on Thursday.

The S&P 500 fell 0.2 percent and the Nikkei 225 fell 0.4 percent but the STOXX Europe 600 rose 0.2 percent.

Meanwhile, the US 10-year Treasury yield rose 2.3 basis points to 2.194 percent as traders waited for news from the Jackson Hole Economic Symposium, where central bankers are expected to provide clues on the outlook for inflation and monetary policy.

Oil prices fell. West Texas Intermediate crude 2 percent amid Hurricane watch while Brent fell 1 percent.

Markets fall as traders await Jackson Hole symposium

Markets were mostly lower on Wednesday.

The S&P 500 fell 0.4 percent while the STOXX Europe 600 fell 0.5 percent but the Nikkei 225 rose 0.3 percent.

“Traders are in wait and see mode ahead of the Jackson Hole symposium that starts tomorrow,” said David Madden, market analyst at CMC Markets.

“We’re about to enter uncharted water: Unwinding QE has never been done before, but it’s about to be tried on markets that have this year exhibited a degree of calm that is worrisome when you consider what may be coming,” said Neil Wilson, senior market analyst at ETX Capital.

Markets rise as traders buy the dips

Markets mostly rose on Tuesday.

The S&P 500 rose 1.0 percent and the STOXX Europe 600 rose 0.8 percent.

Early on Tuesday, the Nikkei 225 dipped 0.1 percent but most other Asian markets rose.

David Morrison, market strategist at Spread Co, suggested that “traders are taking advantage of the recent selloff to buy the dips”.

Indeed, Morgan Stanley chief US equity strategist Michael Wilson wrote that its bull market check list remains intact and recommended that investors “buy the dip”.

Corporate insiders are apparently already doing that.

“The recent dip in major averages has brought insiders off the sidelines,” CNBC reported.

US stock market rises but “looks wobbly”

Markets were mixed on Monday.

The S&P 500 rose 0.1 percent but the STOXX Europe 600 fell 0.4 percent, as did the Nikkei 225.

While the US stock market was positive on Monday, analysts were not particularly upbeat about its prospects.

“With earnings season coming to an end, there is not much to be bullish about right now,” said Richard Perry, a Hantec Markets analyst. He added that geopolitical risk is “still elevated on the Korean Peninsula” while “the political risk of Trump’s presidency remains a driving factor”.

Sam Stovall, chief investment strategist at CFRA, said in a note that “the market’s current technical action points to the possibility of a decline of deeper proportions”.

JPMorgan's Jason Hunter said the S&P 500 could see a sell-off of as much as 8 percent as soon as next month while Paul LaRosa, Maxim Group chief market technician, said that the market “looks pretty wobbly”.

US market seeing cracks ahead of worst month for stocks

The S&P 500 fell 0.7 percent last week, its second consecutive weekly decline.

A Reuters report last week suggested that things are not likely to get better soon.

“September ranks as the worst month for stocks, according to the Stock Trader's Almanac, producing an average price return for the S&P 500 of negative 0.5 percent,” the report noted.

The report also said that more stocks have been making new 52-week lows than highs.

“There are some cracks in market breadth,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald.

Also, with the S&P 500 trading at 17.7 times expected earnings, many investors consider it expensive and at risk of a selloff.

“When you're at these valuation levels in a lot of these names, it doesn't take much,” said Stephen Massocca, senior vice president, Wedbush Securities.

However, CNBC reported that stocks still look cheap relative to bonds.

“Now, the triple-B bond yield is trading about 1.5 to 2 percent below that of the earnings yield,” said Jack Ablin, chief investment officer at BMO. “Now I would argue for at least more attractive capital going into equity over bonds.”

Markets fall, US stocks most expensive since 2003

Markets fell on Friday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.7 percent and the Nikkei 225 plunged 1.2 percent.

While US stocks were lower for the week for the second consecutive week, the S&P 500's earnings per share increased 10.8 percent in the second quarter, the first time the index has posted two quarters of double-digit gains since 2011.

However, the US stock market remains expensive. According to Bank of America Merrill Lynch, the S&P 500's forward P/E ratio rose to 17.7 in July, its highest level in 13½ years.

Bill Baruch, senior market strategist at iiTrader, said that the market has gotten “a little ahead of itself” while Samuel Rines, chief economist and global macro portfolio manager at Avalon Advisors, said that a rise in interest rates “should lead to multiple contraction”.

Other analysts are unperturbed.

Erin Gibbs, portfolio manager at S&P Global, said that the S&P 500's forward P/E ratio would have to touch about 19 times to appear “peakish”.

In the meantime, BMO's Brian Belski said that “we are now closely monitoring our target models to determine if an upward revision is needed”.

Markets fall amid concerns over terrorism and US presidency

Markets fell on Thursday.

The S&P 500 plunged 1.5 percent, the STOXX Europe 600 fell 0.6 percent and the Nikkei 225 fell 0.1 percent.

US stocks were particularly hit by news of a suspected terrorism attack in Barcelona, Spain and concerns that Gary Cohn was resigning as economic adviser to President Donald Trump.

“With the light volume, Barcelona is not something that the market is going to handle well,” said Mark Kepner, managing director of sales and trading at Themis Trading.

“There’s no direct market impact in what Trump has done recently, but if things continue to be so polarized that his agenda is completely dead on arrival, that would have a negative impact,” said Mark Spellman, portfolio manager at Alpine Funds.

Indeed, Brett Arends at MarketWatch noted that over the past 100 years, when the US president has become too politically weakened to lead effectively, the Dow Jones Industrial Average lost an average of 14 percent of its value in constant dollars.

Markets rise as tensions over N Korea recede

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.1 percent while the STOXX Europe 600 rose 0.7 percent but the Nikkei 225 fell 0.1 percent.

“Over the past couple of days we’ve seen a decent rebound in equity markets as risky assets start to regain some of their attraction, as concerns about tensions in North Korea show signs of settling down a little,” wrote Michael Hewson, chief market analyst at CMC Markets.

Indeed, a Bloomberg report noted that compared to other times in the last few years when the S&P 500 took one-day plunges of between 1 percent to 3 percent, the rebound since Thursday ranks among the fastest.

Most analysts think US market overvalued

Markets were mixed on Tuesday.

The Nikkei 225 jumped 1.1 percent, reversing the previous day's 1 percent decline, but the STOXX Europe 600 rose just 0.1 percent and the S&P 500 fell less than 0.1 percent.

The latest Bank of America Merrill Lynch Fund Manager Survey showed that a net 46 percent of respondents considered stocks overvalued, the biggest gap ever recorded in the survey.

At the same time, investors have lowered their expectations for corporate earnings, with a net 33 percent saying profits will improve over the next 12 months, down 25 percentage points from 2017.

However, long-time bull David Tepper, head of Appaloosa Management, does not seem to agree.

“Any comparisons to past overheated markets are ridiculous,” he told CNBC. “I'm not saying stocks are screaming cheap, but you're nowhere near an overheated market.”

Markets rise, earnings forecasts fall

Markets were mostly higher on Monday.

The S&P 500 rose 1.0 percent, the STOXX Europe 600 rose 1.1 percent and the Shanghai Composite rose 0.9 percent.

“After some short-term knee-jerk reactions last week, the market is having that moment of clarity rally—earnings are marching forward, the economy is strengthening, [and] global economic conditions are gaining steam,” said Karyn Cavanaugh, senior market strategist at Voya Financial.

Other analysts are not so sure.

Ryan Vlastelica at MarketWatch said that despite strong earnings growth in the second quarter, analysts have lowered S&P 500 earnings forecasts for 2018 by 0.2 percent since the end of June.

US stock market declines but bull run may not be over

The US stock market fell 1.4 percent last week but some bulls remain undaunted.

John Tobey suggested that “it's time to ride stocks and leave the worrying to others”.

Tobey said: “[T]his market is filled with concerns – its calm rise, higher valuations and the supposed complacency of others. Therefore, there is no bubble to pop.”

Instead, Tobey said that recent warnings about stock investing dangers are a “bullish indicator”.

He quoted Richard Barley as saying that “the real time to worry should be when no one is worried” and that “day has yet to arrive.

Similarly, Jeffrey Saut, Raymond James' chief investment strategist, recently said on CNBC that “it's still a secular bull market”.

However, Saut noted that there has been “some technical damage done” and that he is “not sure the downside is over with”.

Nevertheless, for the longer term, Saut said that earnings have been coming in better than expected and that should help drive the secular bull market.

US stocks buck falling trend but still at risk

Markets were mostly lower on Friday.

Asian stocks plunged. With Japanese markets closed, the Hang Seng led the declines, tumbling 2 percent. The KOSPI fell 1.7 percent and the Shanghai Composite fell 1.6 percent.

European stocks fared little better. The STOXX Europe 600 fell 1.0 percent to its lowest close since 28 February.

Asian and European stocks were mostly reacting to ongoing tension between North Korea and the United States but US stocks managed to buck the trend as the S&P rose 0.1 percent after a report showed that US consumer prices rose just 0.1 percent last month.

“Because the numbers came in lower, the market saw that as an indication that the Fed won't raise rates in September,” said Robert Pavlik, chief market strategist at Boston Private.

Despite the rise on Friday, the S&P 500 ended the week down 1.4 percent.

Ryan Vlastelica at MarketWatch warned of the risk of “further losses ahead” for the US stock market.

Vlastelica noted that both the S&P 500 and the Nasdaq Composite fell below their 50-day moving averages on Thursday and failed to regain those levels on Friday.

“This isn’t a sign that you need to sell everything, but it is a sign you need to be more careful,” he quoted Frank Gretz, market analyst and technician for brokerage Wellington Shields & Co, as saying.

Markets plunge but strategists don't see bear market

Markets plunged on Thursday as geopolitical tension showed no sign of easing.

The S&P 500 fell 1.5 percent, the STOXX Europe 600 fell 1 percent and the MSCI Emerging Market Index fell 1.4 percent.

Government bonds rose. The US 10-year Treasury yield fell five basis points to 2.20 percent and the German 10-year yield fell two basis points to 0.41 percent.

“The markets in general are very on edge and they’re very leery about risk,” said Mariann Montagne, a portfolio manager at Gradient Investments LLC.

CNBC reported that many stock strategists see the possibility of a 5 percent correction for the US stock market but do not see the current selloff turning into a bear market.

“We don't think this is a bear market,” said Julian Emanuel, equity and derivatives strategist at UBS.

Sam Stovall, chief investment strategist at CFRA, said that economic and financial indicators “all tell me now we're not near a recession”.

Markets fall as N Korea threatens strike on US

Markets fell on Wednesday.

The S&P 500 fell less than 0.1 percent, the STOXX Europe 600 fell 0.7 percent and the Nikkei 225 fell 1.3 percent.

Markets fell after North Korea threatened a missile strike on the US territory of Guam.

“Definitely the primary reason stocks are down is geopolitical tensions,” said JJ Kinahan, chief strategist at TD Ameritrade.

“A war is still far from erupting but given recent gains and pricey valuation, prudence suggests it’s best to capitalize on the rising geopolitical tension by taking some money off the table,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc.

Markets mixed as analysts see correction despite better earnings

Markets were mixed on Tuesday.

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

US stocks fell after President Donald Trump warned North Korea about facing “fire and fury” if the latter continued to threaten the US.

“The geopolitical tensions could be the catalyst for the market's direction in the next coming weeks depending on how it all shakes out,” said Robert Pavlik, chief investment strategist at Boston Private.

However, other analysts noted the underlying strength of the market.

“Earnings have been getting better and better,” trader Peter Costa said.

“You've got this underlying strength that is so broad-based and we haven't seen that and that's what's keeping this market aloft in this very steady upward trending motion,” said John Blank, chief equity strategist at Zacks Investment Research.

However, Chris Johnson, CEO of Johnson Research, said that “the market is still a little bubbly” and suggested waiting for “a bit more of a correction” before getting in.

That correction, though, might turn out to be somewhat more than many investors are thinking, according to Bank of America Merrill Lynch chief investment strategist Michael Hartnett.

“I think there will be a moment and quite a significant moment, probably in October or November, but it could be September, when the markets are going to correct and correct quite meaningfully,” he said.

US stocks hit record highs but “inflation could lead to unpleasant surprises”

Markets were mixed on Monday.

The S&P 500 rose 0.2 percent to a new record and the Nikkei 225 rose 0.6 percent. However, the STOXX Europe 600 slipped 0.1 percent.

Despite the US stock market's record-breaking run, some investors remain cautious.

“I’m cautious about what I’m doing,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “I don’t need to chase the market, and nothing is exciting me enough to rush out and spend the cash I have on hand.”

Indeed, a CNBC report suggested that inflation poses an under-appreciated risk to the US stock market.

Scott Clemons, chief investment strategist at Brown Brothers Harriman, wrote in a recent report that “ignoring the risk of inflation, as remote as it may be, could lead to unpleasant surprises”.

Similarly, Bryce Doty, senior portfolio manager at Sit Investment Associates, wrote in an email to CNBC that investors are “unprepared for rising inflation”.

In addition to inflation, Gina Sanchez, CEO of Chantico Global, is concerned that growth expectations have “gotten ahead of reality” and “earnings could under-deliver”.

That, together with high market valuations, “could create a situation where investors should be considering consolidating their positions and getting into wait-and-see mode for the end of the year,” she told CNBC.

Dow at record high but “bearish trends lurking”

The Dow Jones Industrial Average closed on Friday at a record high, its eighth consecutive record.

MarketWatch charts the important Dow milestones.

Just over five months after hitting 21,000 and over six months since hitting the major 20K milestone, the Dow Jones Industrial Average made history again on Wednesday and closed above the 22,000 level. The 109-session surge to 22,000 is the eighth-fastest 1,000-point advance in the index’s history. It’s the third time the Dow has hit one of these psychologically important 1,000-point milestones this year.

See chart.

However, MarketWatch reports that beneath the glow of stock-market records, darkly bearish trends are lurking.

Market breadth, a measure of how many stocks are rising versus the number that are dropping, has turned “exceedingly negative”, according to Brad Lamensdorf, a portfolio manager at Ranger Alternative Management.

Markets rise after positive US jobs report

Markets were mostly higher on Friday.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 rose 1.0 percent but the Nikkei 225 fell 0.4 percent.

Markets were boosted by a report showing that the US economy gained 209,000 new jobs in July.

“European and U.S. markets are pushing higher after an overwhelmingly positive U.S. jobs report, despite the fact that this greatly increased the likeliness of a third and final interest rate hike by the Federal Reserve in 2017,” said IG market analyst Joshua Mahony in a note.

Jeff Zipper, managing director of investments at US Bank Private Client Wealth Management, said that with corporate results “coming in nicely”, stocks “will continue to grind higher until the end of the year”.

Markets mixed, pullback may have further to go

Markets were mixed on Thursday.

The Dow Jones Industrial Average rose marginally to close at another record high but the S&P 500 fell 0.2 percent.

The STOXX Europe 600 rose 0.1 percent. The FTSE 100 rose 0.9 percent but the DAX 30 fell 0.2 percent.

In Asia, the Nikkei 225 fell 0.3 percent but the KOSPI slumped 1.7 percent, dragged down by a 2.5 percent plunge in Samsung Electronics as its de facto head testified for the first time at his corruption trial.

“Investors are leaning a little bit more cautiously simply for the very, very near term because of bullish sentiment being higher than normal,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.

“We think this pullback has further to go,” said Deutsche Bank’s European equity strategists in a note on Thursday.

While valuations are keeping some investors cautious, Goldman Sachs said that there is one measure that suggests stocks may still be cheap.

The “S&P 500 is expensive according to most valuation metrics, but appears attractively valued on free cash flow yield due to reduced capex investment,” said Goldman's Chief US equity strategist David Kostin.

Dow crosses 22,000 as investors ignore valuations

Markets were mixed on Wednesday.

In the US, the Dow Jones Industrial Average rose 0.2 percent to close above 22,000 for the first time but the S&P 500 edged up less than 0.1 percent and the Nasdaq Composite was flat.

Elsewhere, the STOXX Europe 600 fell 0.4 percent while in Asia, the Nikkei 225 rose 0.5 percent but the Shanghai Composite fell 0.2 percent.

“Valuations do look stretched relative to historical norms, but investors are looking a little farther out, and valuations don’t look that bad in that context,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management.

Investors in technology stocks, in particular, are ignoring valuations, according to Arjun Kharpal at MarketWatch.

He quoted an investor as saying last week: “forget about valuations, just own the damn thing”.

In contrast, a CNBC report noted that the tech sector has seen “a divergence between momentum and price action that signals the market may be getting reading to consolidate”.

Jason Hunter, head of fixed income and equities technical analysis at JPMorgan, suggested that the market is “setting up for a pullback in the next few weeks”.

Meanwhile, Brett Arends at MarketWatch suggested that investors could consider global stocks.

But be careful about Japanese stocks. Some analysts think that the months-long lull in Japanese equities could take an abrupt turn in the second half of the year.

Markets rise, Greenspan warns of bond bubble

Markets rose on Tuesday.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 rose 0.6 percent and the Nikkei 225 rose 0.3 percent.

US Treasuries rose, with the yield on the 10-year note falling 3.9 basis points to 2.253 percent.

While some analysts attributed the low bond yields to low inflation, former Federal Reserve chairman Alan Greenspan warned that bonds are in a bubble.

“By any measure, real long-term interest rates are much too low and therefore unsustainable,” said Greenspan. “When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.”

Markets fall as analysts see trouble ahead for stocks

Markets were mostly lower on Monday.

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

The euro rose above US$1.18 for the first time since January 2015.

“The longer this U.S. dollar slump goes on, the more worrying it becomes. It is this that is behind the ongoing rise in the euro and sterling, and it is this that spells trouble ahead for stock markets as August looms,” said IG’s chief market analyst Chris Beauchamp in an note.

However, Avi Gilburt said that while a pullback is approaching, that pullback “will set up the next rally phase”, taking the S&P 500 “toward the 2,600 region into 2018”.

Strategas Research technical analyst Todd Sohn also warned that “there's a seasonal risk into August” but added that once October starts, “you usually see the bullish equities seasonals take over”.

However, for the longer term, analysts at Goldman Sachs said in its third-quarter outlook that annualised returns on the S&P 500 10 years out were in the single digits or negative 99 percent of the time when starting with valuations at current levels.

In light of this, Goldman suggested a look at international small caps, which it said are “well positioned to benefit from the global economic expansion”.

US stock market volatility at all-time lows amid “melt-up in earnings”

Many analysts are becoming nervous about the US stock market, according to a report by Joe Ciolli at Business Insider.

Ciolli quoted Marko Kolanovic, JPMorgan's global head of quantitative and derivatives strategy, as saying that all-time lows in market volatility “indicates that we may be very close to the turning point”.

Baupost Group was reported to have recently said that the lack of price swings is a possible “accelerant for the next financial crisis”.

Nevertheless, most analysts apparently do not see a major downturn in the market. Ciolli reported that a survey of 20 chief equity strategists conducted by Bloomberg showed an average year-end forecast of 2,439, basically unchanged from Friday's close.

And then, there are the bulls, like Edward Yardeni.

CNBC reported that Yardeni sees the recent record highs for the US stock market as being driven by “a melt-up in earnings”, which should be good for the rally.

“I think by the middle of next year we'll be looking at 2600-2700,” he said.

Markets fall as low volatility seen signalling top

Markets fell on Friday.

The S&P 500 slipped 0.1 percent, the STOXX Euroipe 600 tumbled 1.1 percent and Japan's Topix fell 0.4 percent.

“Investors are becoming increasingly wary over the historically low volatility levels, with a host of key economic data coming out in the U.S.,” said Hideyuki Ishiguro, a senior strategist at Daiwa Securities Co.

Jeffrey Gundlach's DoubleLine Capital purchased some five-month put options on the S&P 500 recently.

Gundlach explained that the CBOE Volatility Index had been “really, really low”, and the trade was “like free money”.

Indeed, CNBC reported there is “more concern that the surge in stocks is running out of steam and a top is near”.

While equity funds took in $9.9 billion over the past week, the seventh straight week of inflows, Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, suggested that the pattern is now “becoming more consistent with [an] autumn top in risk assets”.

However, some analysts remain bullish.

Andrew Adams, an analyst at Raymond James, said that the current bull market has been relatively “lackluster” compared to bull markets of the past and said that “it's wrong to assume it has to end in spectacular fashion from current levels”.

Markets mixed amid jitters over valuations

Markets were mixed on Thursday.

The S&P 500 and the STOXX Europe 600 slipped 0.1 percent but the Nikkei 225 rose 0.2 percent.

Diane Jaffee, senior portfolio manager at TCW, said that “people are getting jittery about valuations”.

Indeed, CNN reported that the S&P 500 is trading at 2.1 times its trailing revenue. The last time it was higher was in September 2000 when it was at 2.2 as the dot-com bubble was popping.

Peter Boockvar, chief market analyst at The Lindsey Group, said that while valuations are “terrible short term market signals”, they “matter very much” in the long run.

However, Dan Heckman, senior investment strategist at US Bank Wealth Management, said the price-to-sales ratio is a “lagging indicator”, adding that while the market is not cheap, it is “not overly expensive either”.

US stocks at record highs amid investor optimism seen as warning sign

Markets mostly rose on Wednesday.

The Dow Jones Industrial Average, STOXX Europe 600 and Nikkei 225 all rose 0.5 percent. The Dow, S&P 500 and Nasdaq Composite all closed at record highs.

US stocks shrugged off the Federal Reserve's announcement after its monetary policy meeting that it will start to reduce its holdings of government and mortgage debt “relatively soon”.

Kim Forrest, senior portfolio manager at Fort Pitt Capital, said that the market has been driven by corporate earnings, and that “so far we’ve had enough upside surprises” and “there is still room to grow” for the market.

Indeed, optimism is pervasive among investors. CNBC reported that bullishness in the most recent Investors Intelligence survey hit 60.2 percent, the highest level since late February.

Bears comprised just 16.5 percent of respondents.

“The latest sentiment is not encouraging for the rest of the year as markets rarely fulfill expectations,” John Gray, editor at II, wrote. “This is a new major warning calling for defensive measures to protect profits, renewing the same signal from earlier this year.”

S&P 500 at record high, “bull play still in place”

Markets were mostly higher on Tuesday.

The S&P 500 rose 0.3 percent to close at a record high and the STOXX Europe 600 rose 0.4 percent.

Early on Tuesday, however, Asian stocks finished mixed, with the Nikkei 225 falling 0.1 percent.

Terry Sandven, chief equity strategist at US Bank Wealth Management, said that “valuations are full, but we’re cautiously optimistic because earnings are increasing and the Federal Reserve remains accommodative”.

Ian Winer, head of the equities division at Wedbush Securities, concluded that “the bull play is still pretty much in place”.

Markets mixed as IMF leaves growth forecast unchanged

Markets were mixed on Monday.

In the US, the S&P 500 fell 0.1 percent but the Nasdaq Composite rose 0.4 percent to close at a record high.

Elsewhere, the STOXX Europe 600 fell 0.2 percent while in Asia, the Nikkei 225 fell 0.6 percent but the Shanghai Composite rose 0.4 percent.

The International Monetary Fund left its forecast for this year's global growth unchanged at 3.5 percent in its latest quarterly update to its World Economic Outlook but lowered its forecast for the US economy to 2.1 percent from 2.3 percent.

Meanwhile, though, US corporate earnings for the second quarter have been generally positive, according to Savita Subramanian, equity and quantitative strategist at Bank of America Merrill Lynch, with “the highest proportion of top and bottom-line beats at this point during earnings season in over five years”.

US stock market seen overvalued, may be at inflection point

The US stock indices saw mixed performances last week. The Dow Jones Industrial Average fell 0.3 percent but the S&P 500 rose 0.5 percent and the Nasdaq Composite rose 1.2 percent.

However, with US stock indices near record highs, 65 percent of investors think that the US stock market is overvalued, according to a quarterly investment manager survey performed by Northern Trust Asset Management. That is the highest since the survey began in the third quarter of 2008.

In contrast, 36 percent of investors think the US market is undervalued or fairly valued, the lowest reading on record.

Indeed, Mark Hulbert at MarketWatch pointed out last week that the volume of short selling has been increasing each month since last December.

That, according to a study he cited, suggests that the market may well be at or close to an “inflection point”.

Markets fall as euro rises

Markets fell on Friday.

The S&P 500 slipped less than 0.1 percent but the Nikkei 225 fell 0.2 percent and the STOXX Europe 600 tumbled 1.0 percent as the euro hit a two-year high against the US dollar.

“The fear the European Central Bank will discuss the possibility of trimming its bond buying scheme later this year has driven investors to dump their eurozone equities,” said CMC Markets’ markets analyst David Madden. “To make matter worse, the relative strength of the euro is making eurozone stocks more expensive.”

In the US, the market was held back by General Electric, which fell 2.9 percent after reporting a drop in its second-quarter earnings and revenue.

“From an earnings perspective, it’s been kind of mixed so far and there is no earnings tailwind that investors had been expecting,” said Bruce Bittles, chief investment strategist at RW Baird & Co.

Still, Wayne Kaufman, chief market analyst at Phoenix Financial Services noted that “the breadth we saw in the Nasdaq over the rally speaks very well for what can happen down the road”.

Markets mixed as markets shrug aside Draghi's dovish message

Markets were mixed on Thursday.

While Asian stocks rose following the advances overnight in the US and Europe, the S&P 500 was flat and the STOXX Europe 600 fell 0.4 percent.

European stocks fell despite ECB President Mario Draghi saying at a Thursday press conference that a “very substantial degree of monetary accommodation is still needed”.

“Draghi’s trying to send as dovish a message as possible,” said Oanda’s senior market analyst Craig Erlam. “Markets aren’t buying it anymore.”

Nevertheless, Jeffrey Saut, chief investment strategist at Raymond James, remains sanguine. He wrote in a note that “any downside pressure should continue to be muted while the conditions by the end of next week favor the upside”.

US stocks at new record highs, expected to continue to do well

Markets rose on Wednesday.

The S&P 500 rose 0.5 percent to close at an all-time high, the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 rose 0.1 percent.

“Corporate earnings have been fantastic this quarter, which is shaping up to be one of the best we’ve had in a long time,” said John Bailer, senior portfolio manager at the Boston Company.

Jim Paulsen, chief investment strategist at The Leuthold Group, told CNBC that there is a “Goldilocks sort of economy going” and so “stocks will continue to do well”.

Some technical analysts also seem to think so, according to another CNBC report.

Paul LaRosa, chief market technician at Maxim Group, sees “higher prices in the near-term”.

Scott Redler, partner with T3Live.com, said: “The summer time rally might have just gotten new energy, and energy could be the focus.”

Art Hogan, chief market strategist at Wunderlich Securities, said: “If you're looking for positives, some of the key factors have been established, whether it's yields on the 10-year or commodities prices.”

US stocks at new high, other markets fall

Markets were mixed on Tuesday.

The S&P 500 edged up less than 0.1 percent to a new record but the STOXX Europe 600 fell 1.1 percent and the Nikkei 225 fell 0.6 percent.

US stocks managed to shrug off the collapse of President Donald Trump's health-care bill.

Maris Ogg, president at Tower Bridge Advisors, said that “the bigger picture remains positive” for stocks.

Chinese stocks plunge but economy grows more than expected

Markets were mostly flat on Monday, with both the S&P 500 and the STOXX Europe 600 finishing little-changed.

However, Chinese stocks fell sharply. The Shanghai Composite fell 1.4 percent while the Shenzhen Composite plunged 4.3 percent.

At the end of last week, policy makers at the National Financial Work Conference mentioned “risk” 31 times and “regulation” 28 times, noted Jack Siu, an investment strategist for Asia-Pacific at Credit Suisse.

“There’s a couple of small midcap companies that suddenly changed their guidance from profit to significant loss and I don’t think that was expected by the market,” said Caroline Yu Maurer, head of Greater China equities at BNP Paribas Investment Partners.

Chinese stocks pared losses after a report showed that the economy grew 6.9 percent in the second quarter from a year earlier, better than the 6.8 percent consensus estimate from a Bloomberg survey.

Strong earnings growth could push US stock market to new records

US stocks rose last week. Among the major stock indices, the biggest gainer was the Nasdaq Composite, which rose 2.6 percent. The S&P 500 rose 1.4 percent to close at a record high.

Some analysts think that US stock indices could hit new records in coming weeks, propelled by strong earnings growth.

Karyn Cavanaugh, senior market strategist at Voya Financial, predicted earnings growth of 6 to 7 percent for the second quarter.

“The canary in the coal mine is earnings and the canary is singing a very sweet song right now,” said Cavanaugh.

Markets rise as US data point to dovish Fed

Markets were mostly higher on Friday.

The S&P 500 rose 0.5 percent to close at a record high, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 edged up 0.1 percent.

US economic data released on Friday showed that the consumer price index was unchanged in June, retail sales fell 0.2 percent and industrial production rose 0.4 percent.

“I think this morning’s economic data once again plays into the narrative that the Fed will be more dovish,” said Ian Winer, head of the equities division at Wedbush Securities.

Stocks could crash from Fed liquidity drain

Markets rose on Thursday.

The S&P 500 rose 0.2 percent while the Dow Jones Industrial Average rose 0.1 percent to log its 24th record of 2017.

According to a CNBC report, the US stock market's rally despite political uncertainty is not unusual by historical standards.

However, Nigam Arora thinks that stocks could crash if the Federal Reserve's attempt to drain liquidity from the financial system ends up harming the economy or securities.

Markets rise but dovish Yellen could still prick asset bubble

Markets mostly rose on Wednesday.

The S&P 500 rose 0.7 percent and the STOXX Europe 600 jumped 1.5 percent. However, the Nikkei 225 fell 0.5 percent.

Markets were somewhat buoyed by Federal Reserve Chair Janet Yellen's testimony to the US Congress.

Karyn Cavanaugh, senior market strategist at Voya Financial, noted of her testimony: “She’s back to looking at inflation a little bit more. The market was a little worried but she’s back to the same dovish Yellen.”

Still, Thomas Kee Jr wrote at MarketWatch that with the US stock market already “66% higher than it should be”, Fed monetary tightening could “prick the asset bubble that the market is in today”.

Markets mixed amid renewed US political concerns

Markets were mixed on Tuesday.

The S&P 500 fell less than 0.1 percent but the Nasdaq Composite rose 0.3 percent.

Elsewhere in the world, the STOXX Europe 600 fell 0.7 percent but the Nikkei 225 rose 0.6 percent.

Political concerns over US President Donald Trump's dealings with Russia sent stocks tumbling in late-morning US trading but they recovered later as US Senate Republican leader Mitch McConnell announced a two-week delay in the Senate's August recess to provide more time to work on legislation and approve nominees.

Brad McMillan, chief investment officer for Commonwealth Financial, said that the Senate's delayed break "says to me there's a commitment to make some of the changes that the markets would like to see".

Markets rise but “monetary tightening a threat”

Markets rose on Monday.

The S&P 500 rose 0.1 percent, the STOXX Europe 600 rose 0.4 percent and the Nikkei 225 rose 0.8 percent.

US oil prices edged up and the US 10-year Treasury yield fell one basis point to 2.375 percent.

“Central banks are likely to remain a key focus for investors this week, with the sudden hawkish shift among a number of them in recent weeks pushing bond yields higher and weighing on risk appetite,” said Craig Erlam, senior market analyst at Oanda.

Indeed, CNBC reported that Citigroup strategists have noted that “monetary tightening could be a threat if central banks are perceived to have got ahead of the curve”.

“For now, however, the team believes that there is sufficient earnings momentum to warrant further gains in equity markets, particularly in Europe and Japan,” the strategists added.

JPMorgan strategists, though, warned that the second half of the year “is where the problems could materialize in earnest” if earnings fail to match analysts' elevated expectations.

US stock market set for "big fall in autumn"

Bank of America Merrill Lynch thinks that the US stock market rally may come to an end in the coming months.

Reuters reported last week:

In their weekly round up of global asset flows, BAML said the prospect of more U.S. rate hikes, combined with the ECB readying to scale back its stimulus, meant markets were at a "massive inflection point" in the decade-long easy money trade...

"Next 6 months, higher interest rates likely much more negative for stocks & credit given new central bank policies," its strategists wrote. "Will likely lead to 'Humpty Dumpty' big fall in market in autumn, in our view."

US stocks rise after solid employment report

Markets were mixed on Friday.

The S&P 500 rose 0.6 percent but the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 fell 0.3 percent.

US stocks were boosted by a report showing that the economy added 222,000 jobs in June, better than the forecast of 180,000.

Charlie Ripley, investment strategist at Allianz Investment Management US, said in a note that “the solid employment data should keep the Fed on course for policy normalization”.

However, oil fell. West Texas Intermediate crude fell 2.8 percent while Brent fell 2.9 percent.

Markets fall as central banks shift policies

Markets fell on Thusday.

The S&P 500 fell 0.9 percent, the STOXX Europe 600 fell 0.7 percent and the Nikkei 225 fell 0.4 percent.

“Traders are sensing a shift in central banker’s policies,” said David Madden, market analyst at CMC Markets.

“People are nervous about bond yields going up and you can see that in exaggerated moves in technology stocks and financials,” said Ian Winer, head of the equities division at Wedbush Securities.

Not all analysts are concerned though.

“The market is not getting too panicky just yet,” noted Chris Beauchamp, senior market analyst at IG.

“The Fed has raised rates three times in the last seven months. The markets haven't squeaked,” said Credit Suisse International Wealth Management CIO Michael O'Sullivan.

Mike Antonelli, equity sales trader at Robert W Baird & Co, said: “People should not mistake rotation for volatility, and I am not terribly freaked out as investors are not selling everything equally.”

Stocks rise as oil plunges, tech stocks still at risk

Markets mostly rose on Wednesday.

The S&P 500, the STOXX Europe 600 and the Nikkei 225 all rose 0.2 percent

However, oil fell. West Texas Intermediate crude plunged 4.1 percent and Brent tumbled 3.7 percent.

“We’re seeing vicious rotations in certain sectors,” said Wedbush Securities’s head of the equities division Ian Winer. “Oil’s getting killed and there’s a rotation into biotech and semiconductors.”

However, Nigam Arora wrote in MarketWatch that it is still not time to jump back into popular tech stocks while Larry McDonald wrote in The Bear Traps Report that there are signs the tech sector's out-performance may be coming to an end

Markets fall after N Korea missile test but sentiment near euphoria

With the US market closed for a holiday on Tuesday, markets in Europe and Asia fell.

The Nikkei 225 fell 0.1 percent while the STOXX Europe 600 fell 0.3 percent.

Investor sentiment was hurt by a report that North Korea had successfully test-fired an intercontinental ballistic missile.

The missile test damped sentiment that, according to Mark DeCambre at MarketWatch, had just hit a 6-year high.

“Optimism reached its highest level on Wall Street since 2011 in June, according to strategists at BofA Merrill Lynch, including equity and quantitative strategists Savita Subramanian and Dan Suzuki,” he wrote.

“The recent inflection from skepticism to optimism could be the first step toward the market euphoria that we typically see at the end of bull markets and that has been glaringly absent so far in the cycle,” he quoted BofA as saying.

Markets rise, could “scream higher” before “some ugliness” in late 2018

Markets rose on Monday.

The S&P 500 rose 0.2 percent, the STOXX Europe 600 jumped 1.1 percent and the Nikkei 225 rose 0.1 percent.

John Manley, chief equity strategist at Wells Fargo Funds Management, said that the investment environment is “reasonably good” and that while valuations are high, “they are kind of on the low end of high”.

Energy stocks led gains in the US as oil rose for the eighth consecutive session. West Texas Intermediate crude rose 2.2 percent and Brent rose 1.9 percent.

However, US tech stocks fell, with the Nasdaq Composite declining 0.5 percent.

Technical analyst Tom McClellan, though, thinks stocks are set to roar higher.

“We're still in an uptrend,” he told CNBC on Monday.

However, with the spread between the US 10-year Treasury and the 10-year German bund starting to narrow, he sees a likelihood of “some ugliness” starting in late 2018.

US stock gains seen limited in second half

Market strategists appear to be going against history and are calling for minimal gains for the US stock market in the second half of 2017.

Bloomberg reported that after a 8.2 percent rise in the S&P 500 in the first half of the year, strategists see the index rising by just 0.6 percent in the second half, the least bullish forecast for this time of year since 1999.

This is in contrast to the historical performance of the S&P 500. During the years when the S&P 500 went up between 7 percent and 12 percent in the January-June period, stocks went on to rise 87 percent of the time in the next six months, with increases averaging 5.1 percent.

The lack of optimism among strategists does not faze long-time bull Laszlo Birinyi, president of Birinyi Associates.

“New highs are generally greeted with a yawn,” Birinyi wrote to clients last week. “As the year proceeds, we are actually feeling better about the market.”

Markets mixed, US stocks' hot streak at risk

Markets were mixed on Friday.

The S&P 500 rose 0.2 percent but the STOXX Europe 600 fell 0.3 percent and the MSCI Asia Pacific Index fell 0.7 percent.

Oil rose, with WTI crude jumping 2.9 percent.

Bonds fell. The yield on the US 10-year Treasury note rose three basis points to 2.30 percent.

The advance on Friday left the S&P 500 with a 2.6 percent gain for the second quarter.

Alex Rosenberg at CNBC noted that the second quarter was the S&P 500's 16th winning quarter out of the past 18.

He wrote that there have only been six prior four-and-a-half-year periods in which the S&P 500 rose in 16 quarters or more, and all of them came in the periods that ended between the fourth quarter of 1998 and the first quarter of 2000.

“That is to say, the S&P 500 hasn't performed this dependably since the dotcom bubble,” he said.

However, the streak may be about to end.

“The S&P is and has been overbought for a long while. It should slump,” he quoted Max Wolff of 55 Institutional as saying in an email on Thursday.