So why is the stock market holding up so well (for the moment) amid a potential Lehman event (Cyprus) in Europe?
I suspect, combined with compelling fundamentals, it’s simply a case of been-there-done-that. Recent history strongly suggests that, while it may go down to the wire, political motivation will inspire all the band-aiding and can-kicking the market could ever hope for.
That said, make no mistake, whatever the catalyst, stocks take hits now and again. The fundamentals, as I said, are inspiring, but don’t let that lull you into thinking it’s nowhere but up from here—that’s simply not reality. And I suspect the next correction, we’ll come to know in retrospect, will come from a black swan (an unforeseeable event) swooping in from out of the blue. Thus, foreseeable Cyprus, while it can yet create some real short-term havoc, likely won’t be the catalyst for the next major, extended, decline in stocks.