Goldman Sachs this morning warned that “pain” is coming to the stock market. Low paying bonds and cheap borrowed money have produced an average valuation that’s higher that at any point since 1900 (the year, not the index). That’s a long time ago. And speaking of “a long (long) time” and an Elton John song with those lyrics, “Rocket Man” Kim Jong-un is testing an intercontinental ballistic missile that has the ability to reach the United States.
These two points should be enough to pull money into bonds and lower interest rates. However, Pending Home Sales for the month jumped from a 0.6% gain to a 3.5% gain, and a 2nd Q3 GDP reading showing 3.3% growth in the U.S. are keeping traders hands off the “sell” button for now.