The Daily Prophet: Admit It, Stocks Are Pretty Boring These Days

You’re not imagining things. The U.S. stock market is about as much fun these days as watching paint dry. The S&P 500 Index is basically flat over the past six weeks. The reason most often cited is the realization that President Donald Trump may not have such an easy time pushing through such market-friendly stimulus measures as tax cuts, bank regulatory reform and infrastructure spending after his health-care defeat.

Rather than seeking to soothe investors’ nerves as valuations hover near record highs, an increasing number of influential analysts are sounding concerned. Bob Doll, the chief equity strategist and senior portfolio manager at Nuveen Asset Management, said sentiment on the U.S. economy may be too high, leaving investors vulnerable to negative surprises. Stocks and junk bonds may suffer in the short-term, with the chance of a deeper sell-off growing, he said. Thomas J. Lee, managing partner at Fundstrat Global Advisors, said in a report Friday that the recent rise in junk bonds yields have equated to S&P 500 losses of 4 percent or more since 2010.

Wells Fargo strategists said last week that they are worried stocks have gotten too pricey after the S&P 500 rallied more than 12 percent from the day after the election to the beginning of March “with nary a whiff of a pullback.” That “just doesn’t occur all that often in any market environment.” That may be so, but this bull market in stocks has continuously found ways to prove the doubters wrong over the past eight years.

WHAT JUST HAPPENED AT THE T-BILL AUCTION?
The U.S. government’s weekly auction of one-month Treasury bills turned out to be a dud in what may be a reflection of early jitters about raising the nation’s debt ceiling. House and Senate appropriators are working this week to resolve more than 100 issues in the 10 spending-bill omnibus package needed to keep the government open after April 28. But that isn’t assured. At today’s auction, Treasury Department received bids of just 3.03 times the $55 billion amount offered. That’s the lowest bid-to-cover ratio this year, and among the lowest for any auction going back to 2009. House Speaker Paul Ryan recently said Republicans will likely attach some kind of additional legislation when Congress tries to address the ceiling, raising the risk of a showdown. Democratic leaders have said they will only support a “clean” extension, without partisan riders.