It’s beginning to seem that, short of war, this
market’s going up, so perhaps it’s no wonder that talk is building of a
2000-style stock market bubble.

Shares jumped 1%
last week, notching another all-time record high despite a serious
confrontation between the U.S. and Russia over its moves in the eastern
Ukraine. Geopolitical concerns were trumped by improving U.S. economic data,
and conciliatory-sounding comments from Russian President Vladimir Putin
assuaged the market. Nevertheless, the situation on the ground in Crimea
remains unpredictable and tense, and could yet come back to slam the market.

On the week, the
Dow Jones Industrial Average picked up 131 points, or 0.8%, to 16,452.72. The
Standard & Poor’s 500 index gained nearly 19 points to 1878.04, a new high.
The Nasdaq Composite index rose 28 points, or 0.65%, to 4336.22. The Russell
2000 small cap index soared 1.7%, or 20 points, to 1203.32, and a nearly 3%
one-day jump Tuesday helped fuel the bubble talk.

The more
important geopolitical issue could extend beyond the dust-up over the Ukraine,
leading to future market-slamming confrontations between the West and Russia
over other issues, like Syria and Iran, says James Russell, senior equity
strategist at U.S. Bank Wealth Management. “Cooperation with Russia could
be off the table, and that could lead to more strident event risk later this
year,” he adds.

U.S. domestic
data continue to show trends that are “two steps forward, one step
back,” Russell adds, but remain supportive nonetheless of the rally. Last
week’s report of a drop in jobless claims and a larger-than-expected rise in
payrolls was welcomed by investors.

In addition to
the equity rally, a hot IPO market is also behind the bubble talk. Initial
public offerings are ramping up so the market will have to digest a lot of new
stock supply, he adds. Bad-weather issues might also be reflected in the
first-quarter reporting season (Barrons Online).