This is a common view of much of the mainstream analysis as common threads still relatively low interest rates, corporate profitability, and low unemployment rates are set to keep the bull market running well into the foreseeable future. But much of the rally since the 2009 recessionary lows has been an influence of outside factors. Interest rates are low because of the Federal Reserve’s actions, corporate profitability is high due to share repurchases, accounting rule changes following the financial crisis, and ongoing wage suppression.
But now, all of that is beginning to change. Interest rates are rising, the yield spread is flattening, and Central Banks globally are “beginning the end” of the “Quantitative Easing” experiment.