Stocks outperform bonds: Is there more to go?


The comeback in stocks has been sharp and sudden. But after such a prolonged stretch when Stocks outperform bonds, is there still room left for a further bullish upheaval?

We're back to bonds' pain and stock the upward impulse in Treasury yields resumed. The necessary front of the increased inflation and growth hopes, and swelling risk appetites, embedded in the stock-market action.

Estimates vary widely on what 10-year Treasury level would present more friction for stocks, starting at 2.75 percent Goldman Sachs and heading up toward 4 percent. The stocks are not cheap in total and the "distinctive" stock is more expensive than the indexes. The growth story or sudden inflation/Fed scare into the New Year and buyer's regret could set in quickly.

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Stocks outperform bonds

A result of this persistent bid is an overbought market, the Russell 2000 rally to numerical gauges of buying extremes. One day this week more than 18 percent of S&P 500 stocks hit a new 52-week high. The sentiment has turned bullish per adequately of indicators. Overbought and "over-bullish" don't signify "sell everything. Here's an ETF that tracks the group (and also some digital media giants such as Alphabet): PowerShares Dynamic Media Portfolio

Stocks outperform bonds

Beware of Dow Jones New Highs

Would it be nice if the Dow Jones hit new highs of 20,000 levels next week just as the Fed was ready to give a rate hike? The market is pleading for and the public expresses renewed hopefulness based on an administration. The Dow Jones 20,000 levels are often another reason for a break. But markets lost from the tidy story lines more often than they follow them.

Stocks outperform bonds

Finding another spot on Trumps Trade

There's plenty of divergence among sectors, and it's been impressive the way groups have taken turns leading the market. The defensive areas up nicely today as the cyclical and financials take a pause. This seems to show money not looking to exit the market completely but finding another spot. Media stocks have been projecting out-performers the past week. A once covering and despised segment of consumer discretionary whose stocks had become cheap. Technical strategists are starting to take note of the revitalized momentum here. Not a pure Donald Trump trade, but the incoming administration is supposed to be more friendly toward traditional media over digital upstarts.

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