Stocks in the US are back in bull market territory this month but don't tell that to the market bears.
That's because it seems like just around every corner, there seems to be a risk that could take the steam out of the current rally and send risk assets into a sharp drawdown only matched by those related to recent economic, political, or security dysfunction.
Make no mistake, this year's risk asset rally is likely to be one of the most hated bull markets in history. That's because some major indices continue to charge higher even as various indicators point to hazards ahead for the US and global economy and hence, corporate earnings that underpin corporate asset valuations.
And you see, this is a particular problem for some investors because the thinking goes that it's foolhardy to be fully invested at a time of rising interest rates, slowing economic activity, and looming geopolitical risks because these events have the potential to topple risk asset prices that already appear to be overvalued compared to many historical measures.
Even so, some market bulls are taking even greater risks as they look past events that are likely already priced into the market and shift their focus to up-and-coming developments that could supercharge economic growth over the next decade.
So, who's got it right?
Is the current rally nothing more than a bull trap, that could lead to a renewed bear market and set the stage for one of the sharpest downturns in quite some time, as rising interest rates trigger the next bank panic and economic recession?
Or does this bull market have legs, and will it continue to charge higher into the second half of the year?
Now, while it's still unclear whether bulls or bears are making the right call, which way the market goes in the months and year ahead will likely depend on the dominant market narratives currently underpinning investor sentiment.
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