"Nothing seems able to prevent this market from reaching new highs," says Ben Levisohn in Barron's. America's S&P 500 and Nasdaq Composite indices hit new records late last week. This set the tone for equities in general, helping Britain's FTSE 100 reach a new peak.
Yet there seems to be plenty to worry about, as Patrick Hosking notes in The Times. In Britain, what everyone thought was "a nailed-on election triumph for the ruling pro-business party" has turned into "a close-run thing". Nor do the "policy U-turns and pantomime antics" of the Trump government appear to have unnerved investors. America's withdrawal from the Paris climate treaty is another "pointer to a more fragmented, inward-looking and unstable global community".
Last week's payroll figures, showing that a mere 138,000 jobs were created in May, were disappointing, adds Levisohn. Investors who have acknowledged that we probably aren't going to get a "Trump bump" from tax cuts, higher spending and deregulation anytime soon have been saying that a pick-up in economic growth justifies piling into stocks. But now there must be at least some doubt about that.
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Nonetheless, while US valuations are historically high, and investors seem too relaxed, it's hard to see the rally collapsing in the near future. US growth is set to quicken this quarter, and the global economy has strengthened too. The latest earnings season on Wall Street has been encouraging, with sales growth rising by 7.4%. The solid results aren't just a question of boosting margins through cost-cutting, says John Authers on FT.com.
More broadly, however, the rally can still depend on the "constant nourishment of easy money", as the Financial Times's Michael Mackenzie notes. Since the crisis, the four key central banks US, Japan, UK and eurozone have bought a collective $14trn of assets, mostly bonds, with printed money. This year alone, according to Bank of America Merrill Lynch (BAML), they have topped up the "liquidity punchbowl" by $1.1trn.
While the US Federal Reserve is raising interest rates slowly, other central banks have cut rates or kept buying assets of late, and the loosening will endure into 2018. For now, then, with global growth expanding and interest rates still near all-time lows, equity markets will still have a strong tailwind. The danger, of course, is that more and more investors pour into stocks and central banks are too slow to tighten, leading to a "speculative mania" reminiscent of 1999, as BAML points out. But we're not quite there yet.
