Why some experts think stocks could face a reality check

Economic thunderclaps — a much-rattled bond market, gnawing fear that inflation could explode again, Trump's escalating trade war with Canada, just to name a few — give some who save money in 401(k) plans reason to think about running for cover.

So far, we've not seen anything close to a wild sell-off in the stock market as summer draws near a close. It may be tough for many folks to get riled up, after all, about a sharp sell-off in the U.S. Treasury market in August when we just watched the Dow Jones Industrial Average break an all-time record close of 54,085.88 points on Aug. 4.

Yet that doesn't mean some experts aren't sensing a need to take a step back here and prepare for a "welcome to reality" moment. It may be time for many to consider whether they're too confident taking on too much risk. It's hard to know when we might see a shift ahead here for stocks. But some warn of potential trouble.

"I do believe that the current troubles in the bond market do not bode well for stocks for a variety of reasons," said Paolo Pasquariello, professor of finance at the University of Michigan.

Original source: https://www.usatoday.com/money/