The biggest news to catch my eye came from a guy called Dennis Gartman (who writes The Gartman Letter), who changed from expecting a correction to posing the suggestion that maybe we’re in a market melt-up.
This is the opposite of a meltdown when market indexes collapse, as we saw in 2007 and 2008 ahead of the GFC. Meltdowns are triggered by a shock geopolitical event, such as September 11. That’s why we have to be wary of the Russian-Ukraine problem — or when it looks like a recession is on the way, maybe because banks lend to the wrong people and debt ratings agencies wrongly rate risky products as AAA!
A meltdown could be as little as 10% but could go to 50%, while melt-ups have been 20% to 100% events. If this is a melt-up, it will be a more restrained one.
The key causes are good earnings reports (and the US has got them), a strong economic recovery (I think that’s happening) and decreasing interest rates. This isn’t going to happen but the current issue the market is wrestling with is: will the Fed start raising interest rates as early as March next year? This is becoming more talked about since last week after the Fed minutes were released but the majority still thinks it will be next June or September.