Markets are so calm that some investors would be happy to hear any bad news

There’s nothing thrown at this bull market in equities that seems able to stop its run, eight years in.

Volatility is at a historic low, judging by the benchmark CBOE Volatility Index. And historically, in the year before market peaks — if we were to assume this one is near — returns are usually above-average, noted Bank of America Merrill Lynch.

Earnings growth in Europe and the US with slow improvement in the global economy and not too much inflation has created a “pretty good setup for equities,” said Laurence Taylor, a portfolio specialist of global equities at T. Rowe Price.

“The problem is it feels like you want to go find the negativity and the contrarian instinct, the risk,” he told Business Insider. “We’re trying to be generally contrarian, trying really hard not to be consensus,” he said, adding that his fund is looking into promising names in the troubled department-store sector.

“It’s also what people want to hear about now which is ‘tell me the bad stuff, tell me the negative stuff,’ Taylor said. “They want you to talk them through what to be fearful about now or in in six months.”

Eight years into the bull market’s run, the latecomers don’t want to miss the whole party.

“Eight years ago, half of China’s GDP didn’t exist, Justin Bieber didn’t have any tattoos, and Uber didn’t exist,” Taylor said. “It’s a long time. We might finally have gotten past something changing and that I think is the friction: how much do you pay for that potential improvement?”

The S&P 500’s valuation — at 25 times earnings based on analysts’ forecasts for the next year — is not what ends bull markets, Taylor said. But that’s part of what’s sending mixed signals.

The bond market, however, may be in an outright bubble, he said, amid negative yields. “Paying the Swiss government money to have your money — that doesn’t sound right.” The country’s 10-year bond yield was at -0.172% on Thursday.

“If the Fed doesn’t get things under control, you might see a bout of irrational exuberance,” said Christopher Harvey, a senior analyst at Wells Fargo, as rates fell last week and the benchmark 10-year yield approached 2%.

“If you’re discounting everything at a lower and lower rate, then equities should go higher and higher,” he told Business Insider. “My concern is that if the Fed doesn’t get a handle on the back end of the curve or help push rates higher, you can start to see speculation, leverage, and irrational exuberance come back into the marketplace. We’re not there yet, but that’s my marginal fear.”

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