We have just had the worst earnings warning season since the recession, economic numbers around the world are coming in soft and peripheral spreads in Europe are close to record wides. In summary the news has been terrible. Yet the market is hanging in. There is a saying that "the reaction to the news is more important than the news itself". This is enough to stop me from being bearish but I cannot be bullish either with the deteriorating economic situation and the mixed sentiment.
It seems that dividend paying stocks are the new bonds. Many income investors are being forced into dividend paying stocks unable to find yield anywhere else. This adds a dynamic to the market that is difficult to quantify. Yield chasing does not typically end well but its possible that we are still in the early innings.