Climbing the Wall of Worry

Updated: Dec 10, 2019


When stock markets advance, even in the face of negative news, analysts refer to it as “climbing a wall of worry.”

The ability of today’s markets to climb a wall of worry suggests investors are confident that negative headwinds will be overcome at some point.

Overall, we share this confident view of current markets, but there are notable caveats. Despite some mildly positive developments in the ongoing US China trade tensions, we see this simmering conflict remaining a drag on growth for the foreseeable future.

Political developments also have the potential to push positive news to the side lines. Uncertainty surrounding the efforts to impeach President Trump could take center stage in the fourth quarter.

The growing odds of a hard no-deal Brexit also remain cause for concern.

However, on balance, we are confident that a global recession is unlikely to take hold until 2021 or later.

For now, investors will likely continue to discount bad news as markets climb a wall of worry.

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