Challenging conventional wisdom

CONVENTIONAL wisdom is that stocks are being battered by growth slowdown concerns, mainly in China, earnings worries, turmoil in the currency market - the yen has somewhat perversely become a safe haven despite Japan operating a negative interest rate regime - and the spectre of higher US interest rates in the weeks ahead.

Yet, conventional wisdom is not always right and there are those in the minority who periodically emerge as challengers. For example, markets viewed sliding oil prices as universally bad in January and February but exactly why so is not known since there have to be benefits as well.

Also, even though most observers accept that the US economy is gaining traction and that rates will have to be hiked soon, Rabobank noted last week that despite the relatively robust US labour market (at least on paper), a number of additional concerns are unlikely to have escaped the Fed's collective view.