Far from being "breaking news", the consistently strong performance of the major U.S. (and international) equity indices is taken for granted by everyone from the richest hedge fund manager to my retired grandmother. When everything is going swimmingly on the surface, one way to gain an edge is to look "under the hood" at the factors driving stocks and the market internals.
As the U.S. Treasury yield curve has flattened over the last year and more particularly since the third quarter of 2017, many have wondered aloud if this development reflected a greater likelihood for a forthcoming recession.
We began last week by wishing everyone the obligatory Happy New Year. And as it turned out, it has already been very happy for the U.S. equities bulls. This is also true for their international counterparts, even if politically challenged Germany is lagging a bit.