While the idea that anything could go wrong in global stock markets (especially US markets) is simply incomprehensible to most, Bloomberg's macro strategist Mark Cudmore dares to mention a few of the more prescient 'known unknowns' that could hamper the meltup for the rest of the year...

Via Bloomberg,

The base case for the last 11 weeks of 2017 is that the global equity bull market marches on, or even accelerates.

But it’s worth determining which known risks have the potential to significantly derail it and which ones can be mostly ignored.

The MSCI All World Index has risen more than 40% from its February 2016 low without a 10% correction. What could cause one before year-end?

Globally, the combination of good growth, solid earnings, and excess liquidity remains supportive.

Excluding true black swans (i.e. unknown unknowns), here are three critical candidates to keep an eye on:

Military conflict in North Korea is the obvious one. Its potential for disruption is so massive it needs no further explanation.

With Spain threatening to seize direct control of Catalonia, large-scale civil unrest and martial law can’t be ruled out as a possibility. The looming removal of any autonomy for the region is unlikely to be accepted without a fight. The hit to European sentiment and assets has the potential to be severe enough to ripple through global markets.

A U.S. government shutdown into year-end during the illiquid holiday season is an entirely underestimated risk. Since at least a temporary agreement has always been reached in the past, investors are assuming the same again, especially with mid-term elections putting pressure on the major parties to compromise.

But Trump’s decision to undermine the Affordable Care Act by removing subsidies for health insurers has only increased the partisan divide. The official December 8 deadline isn’t a binary moment for markets, but as we get farther into December with no deal, the negative asset impact would be severe.

Other risks - including Nafta negotiations, China deleveraging, Brexit talks, U.S. tax reform failure, Kurdistan, German government formation and an inflation pick-up - will be discussed =tomorrow