These are a few of a bear’s favorite things.
Those realities explain why stocks, bonds, and credit finished in the red last month. But they aren’t any use in understanding why risk assets will end the year at record highs.
The current bull market has as much to do with sentiment as fundamentals. With the U.S. economy running on all cylinders, investors have more money to put to work. As long as CDs and short-term corporates aren’t cutting the mustard, money will continue to flow into assets that have performed well in the last few years.