Market rebound in spring could give way to some turmoil if past trends hold

Market rebound in spring could give way to some turmoil if past trends hold


Traders on the floor of the New York Stock Exchange.

Source: NYSE

About six months after a presidential election and more than a year after a deadly market downturn, stocks remain buoyant near record highs.

The market leadership spins as if it were choreographed, helping to keep the index withdrawals shallow despite a long period of upbeat sentiment and economic enthusiasm. Conditions look ripe for some sort of correction, but the rally continues. As the gang swayed around election time, Wall Street found a lot to like about the policy mix launched in Washington.

T-bill yields have broken all-time lows and investors are a little wary of the level that could dampen the economy and pinch stock prices, but so far little damage has been done.

The yield curve steepened, a sign of economic optimism and the Fed’s abstinence. Corporate profits are levitating. Bad bond risk spreads slumped to record lows due to precarious extremes during the latest stock crash.

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