For weeks now, US stock markets have been hitting records, a rise claimed by President Donald Trump as proof of a healthy economy.
But Mr Trump’s pride in the numbers is at odds with analysts and investors, who have expressed increasing discomfort over the market’s climb.
About 65% of investment managers surveyed by Northern Trust last quarter said they believed shares were over-valued, the highest ever in the firm’s report.
Surveys by Bank of America Merrill Lynch have expressed alarm about the high prices, as have policymakers at the Federal Reserve.
“We are concerned about equity valuations right now,” says Mike Morrill, chief operating officer at DF Dent, a Baltimore-based investment company. “We’ve had nine years of a strong bull market and that’s not going to last forever.”
The sentiment is similar to statements Mr Trump himself made before his election, when he said the stock market was “so bloated” and warned people to “be careful”.
If investors believe prices are too high – and are buying anyway – that could be a sign of a bubble.
So is the stock market rally a reason to cheer, as Mr Trump suggests now? Or could a crash be around the corner?
Pride before a fall?
Stocks, which have been on a long-term upward trend, surged early in 2017, amid optimism over business-friendly policies endorsed by the Trump administration, such as tax reform.
Analysts say that without clear signs of progress on reform in Washington that effect has faded.
Now, it’s strong corporate revenue and profit growth that are boosting share prices, with gains going to larger, multinational companies.
The three major measures – the S&P 500, the Dow Jones Industrial Average and the Nasdaq – have climbed between roughly 10% and 17% so far this year, compared with about 6% to 7% during the same period last year.
US ‘doing well’
The Nasdaq has hit a new high more than 40 times this year. Since 2012, the value of the S&P 500 index has almost doubled.
“The stock market hit the highest level it’s ever been,” Mr Trump boasted on Wednesday as the Dow Jones Industrial Average exceeded 22,000 points on Wednesday morning.
“Our country is doing very well,” he said.
But that hasn’t stopped the muttering that the stock market, at least, is due for a correction.
Robert Shiller, a Nobel Prize-winning economist at Yale University, says share gains reflect optimism about where the economy is heading, but it’s an unreliable forecasting tool, and shifts quickly.
“The stock market is mostly psychology,” he says. “The fluctuations in it mean that we’re in an optimistic mood but we could change and we could change suddenly.”
Investors are trying to anticipate what might trigger a change – whether it be rising interest rates, weak consumer spending, developments overseas or something else entirely.
Mr Shiller says he thinks Mr Trump himself poses one of the biggest risks.
The firestorm in Washington in May after Mr Trump fired former FBI director James Comey prompted some of the biggest one-day share sell-offs this year.
“Usually, presidents are not able to transform the economy unless he does something disastrous, which transforms it down,” says Mr Shiller. “I’m thinking that it’s more likely he will create some kind of uncertainty, disruption and that might be a trigger for decline.”
A new tech bubble?
Many of the biggest gains come from a single sector – technology stocks – the same industry that some investors say is overvalued.
The S&P 500 information technology index, which averages 68 companies, including heavyweights such as Apple, Microsoft and Facebook, last month passed the record set in March 2000.
The index rose about 22% in the first seven months of 2017, while the broader S&P 500 climbed about 10%.
Some say the gains in tech make sense, as investors target a part of the economy seeing rapid growth.
However, others worry that in some cases the rise in shares has little to do with the companies’ actual prospects.
And in more recent weeks, tech stocks have come under pressure.
If the sell-off spreads to other sectors, it could be a warning of bigger problems.
Jill Hall, a US equity strategist at Bank of America Merrill Lynch, doesn’t expect stock markets in general to rise much more this year, but she’s not predicting a big sell-off either.
She thinks investors will shift their money from the high-growth tech industry into sectors such as energy, health care and finance.
“What we’re expecting is more of a rotation out of growth and into value,” she says.
Some say they’re worried Federal Reserve and central bankers elsewhere will move too aggressively to increase interest rates, causing havoc in bond and stock markets.
About 27% of investors surveyed by Bank of America Merrill Lynch last month identified a mistake by central bankers in the US and Europe as the biggest risk to their outlooks. Another 28% were worried about bonds.
Mr Trump himself raised alarms on these lines at a presidential debate last year.
“We are in a big, fat, ugly bubble,” he said.
“The only thing that looks good is the stock market. But if you raise interest rates even a little bit, that’s going to come crashing down.”
That’s something that is not lost on the central bankers responsible for monetary policy.
Last month Federal Reserve chair Janet Yellen told a US congressional committee: “We want to make sure that we manage this in a way that is not disruptive to financial markets.”
And that’s a sentiment financial markets would no doubt endorse.