US stocks riding into sunset of low-interest era

WE are about to find out whether the bull market can outlive the low-interest-rate era and, possibly, the era of globalisation.

US stocks were more or less flat last week as a strong jobs report forced traders to accept that ultra-low interest rates would soon be a thing of the past. There is likely to be further weakness this week unless industrial, consumer or second-quarter earnings data steer central bankers away from a tightening policy.

The US economy added 222,000 jobs in June, bounding over economists' expectations, even as the unemployment rate ticked up to 4.4 per cent - though that was primarily a function of more potential workers identifying themselves as job-seekers.

"The employment number keeps the Fed on track for a further rate hike this year and the winding-down of the Fed's balance sheet," said Quincy Krosby, chief market strategist at Prudenti…