FED EXPECTED TO HIKE NEXT WEEK
Sovereign debt, large government deficits, rising interest rates, and the return of the “bond vigilantes” have become increasingly prominent concerns for investors. Add in persistent inflation, the yen carry trade, potential Fed rate hikes, geopolitical and energy risks, questions surrounding massive AI spending, and the possibility of an economic slowdown or earnings recession—and there is no shortage of reasons to worry.
But worrying about a risk and seeing evidence that it is actually beginning to damage the bull market are two very different things.
In this week’s video, we examine these concerns through the lens of market history and the weight of the evidence. What should we expect to see in stocks, bonds, credit markets, relative strength, trends, and other indicators if one or more of these risks is becoming serious enough to derail the bull market? We also revisit the 2000–2002 bear market to illustrate how deteriorating fundamentals and major economic problems can begin showing up in market prices and trends before the full story becomes obvious.
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