FORTUNE -- Marriage counselors often say a certain level of disagreement is healthy. That's true for the market as well.
BlackRock, the giant asset management firm, released its 2014 outlook on Monday. The firm says that stocks look expensive right now and could "head south" next year. Included in the report is a chart that tracks how often stock and bonds move in the same direction.
Typically, we expect stocks and bonds to move in opposite directions. But this year the correlation between stocks and bonds has shot up. Heading into the year, stocks and bonds were moving in the opposite direction 80% of the time. Now, the correlation is positive -- meaning that stocks and bonds more often than not have been moving in the same direction.
That could be a sign that investors have grown complacent. In the past, similar spikes have preceded market drops. The correlation between the stock and bond markets jumped in 1999, just before the 2000 market plunge. Correlation stayed low for a while, before going positive again for most of 2007.
Since then, stocks and bonds have been more disconnected than usual, until recently.
Of course, that doesn't mean the market is doomed. Stocks and bonds moved in the same direction for most of the 1980s and 1990s without a problem. BlackRock says that could have been the result of the long, slow drop in interest rates. BlackRock says a long, slow rise in interest rates might have the same effect.
And while spikes in correlation have tended to mean bad news for stocks and good news for bonds, the opposite could be the case this time. That's what we saw on Friday after the stronger than expected jobs report. Stocks rose and bonds fell.
Interest rates are at an all-time low. That gives investors less reason to run to the bond market if stocks look risky. That could keep money in the stock market for longer than people expect.
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FORTUNE - If Wall Street hates the fact that President Obama will get four more years in the White House, someone forgot to tell the bond market.
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The casino isn't paying off the way it used to for the big banks, but don't count them out just yet.
So says Sanford Bernstein analyst Brad Hintz. He says Goldman Sachs (GS), JPMorgan (JPM) and their peers are headed for another profitable quarter, but warns that trading riches are making themselves scarce.
"Trading volumes look a little light," Hintz said Monday on Bloomberg Television. "Will trading be a much smaller business MOREColin Barr - Mar 7, 2011 3:22 PM ET
Is Anglo Irish the world's most destructive bank?
The reckless property lender was bailed out by the Irish government after the global credit bubble started deflating. But two years later, the toll exacted by that effort keeps rising, much to the chagrin of Irish taxpayers.
An analyst at Standard & Poor's said Tuesday that the cost of dealing with Anglo Irish may exceed 35 billion euros ($47.5 billion). That's up from the MOREColin Barr - Sep 28, 2010 1:16 PM ET
A big sovereign debt default isn't as likely as you think, the staff of the International Monetary Fund said.
Investors and commentators seem to view a default by a rich-country government as "inevitable," the IMF said in a paper released Wednesday. Thus the surging debt spreads in places like Greece, Spain, Ireland and Portugal.
But a look at history says the bond market often overreacts to signs of stress – and is MOREColin Barr - Sep 1, 2010 3:34 PM ET
The Chinese are buying Treasurys again.
China's official holdings of U.S. government bonds rose for the first time since last September, the Treasury Department said Monday.
China bought a net $18 billion worth of Treasury bills, notes and bonds in March, according to the monthly Treasury International Capital report. That brings its world-leading Treasury hoard to $895 billion.Colin Barr - May 17, 2010 10:09 AM ET
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