The story of Juan José Padilla must be legend within the Spanish bullfighting community. Blinded by a bull in one eye in late 2011 after badly losing his footing in a bullring, the matador made a stunning comeback to the arena about six months later, much to the utter shock of fans.
Similarly, Wall Street investors find themselves facing off with a bull of their own, one that is in its ninth year and, despite being beset by a cavalcade of concerns, appears on the verge of resuming the second-longest run since WWII.
That is perhaps much to the consternation of bears and the confusion of nervous optimist alike.
On Friday, the 13th no less, the S&P 500 index SPX, +0.11%[1] finished above 2,800 for the first time since Feb. 1, piercing a psychological, round-number level that had proven a source of key resistance for the market since it stumbled badly into correction territory on Feb. 8[2].
Indeed, the S&P 500 finished Friday’s session 0.1% higher at 2,801.31, the Dow Jones Industrial Average DJIA, +0.38%[3] closed up 0.4% at 25,019.41, while the Nasdaq Composite Index COMP, +0.03%[4] mustered sufficient momentum to eke out back-to-back finishes at an all-time closing high at 7,825.98, up less than 0.1%.
The S&P 500 sits just 2.5% from its Jan. 26, record, while the Dow stands 6% short of its closing peak from earlier in the year.
The recent uptrend has come in fits and starts, but come it has, amid the aforementioned headwinds. Those factors include:...
- Persistent fretting about posturing over trade between the U.S. and its partners across the globe. A concern that is benign at the moment, with China and the U.S. exchanging tariffs[5] of 25% on some $34 billion of products last week, but some fear this could metastasize into something more disruptive to markets
- A tightening spread between short-term interest rates and their longer-term counterparts: Because lenders tend to demand richer returns for lending for a longer period, a shrinking of the yield curve, as bond investors refer to the yield differential between different maturing bonds, has raised questions about the economic outlook. The gap between the most closely watched 2-year and 10-year Treasury notes is at 24.9 basis points, or 0.249 percentage points, as of late-Friday, marking its tightest since 2007. On top of that, an inverted yield curve, where the shorter