If bull markets die in euphoria, as Sir John Templeton once famously said, then the market may be approaching the sort of exuberance that might have put the British investor and fund manager on edge.

At least, that’s judging by the recent coverage of the unrelenting stock-market climb into record territory, with few signs on Wall Street of the historical normal levels of fear or volatility as measured by the CBOE Volatility Index VIX, -2.38% .

On CNBC’s “Halftime Report” on Friday, hosted by Scott Wapner, guests and regulars on the segment struggled to offer a bearish comment.

“For the first time in a number of years,” investors are looking at a “global economic recovery” that is synchronized, said regular contributor Josh Brown, chief executive officer of New York investment advisory firm Ritholtz Wealth Management.

Others on the segment pointed to revived optimism over the prospect of wide-ranging corporate tax cuts from President Donald Trump’s administration and congressional Republicans. Erin Browne, UBS’s head of asset allocation, said “we are in the very early days” of the tax trade, and “very little” of the market’s current rally is being fueled by tax-overhaul hope.

On top of that, quarterly corporate results are expected to outperform, and economic readings have been better than expected, if not a bit muddled by recent natural disasters.

Read:Hurricane Irma prevented at least 1.5 million people from getting to work in September

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The implication is that equities, at least in the near-term, are likely to grind higher, and investors ought to strap in for the ride.

The optimism comes as a number of market veterans have begun discussing a so-called melt-up environment for the stock market, as noted by MarketWatch editor William Watts. That is a dramatic, unexpected rise followed by a “stampede of investors who don’t want to miss out on the rise, rather than by improvements in fundamentals.”

That said, recent stock gains haven’t been marked by anything truly resembling a stampede. It seems as if investors, perhaps bitten by previous bearish resistance that proved ill-timed, are finding fewer reasons to be critical of a bull market that has entered its ninth year—that, or euphoria is slowly seeping into the system.

The Dow Jones Industrial Average DJIA, -0.87% logged its 46th record close of 2017 during last week’s trade. The S&P 500 index SPX, -1.11% has registered 43 all-time closing highs so far this year, and its longest streak of record closes—six in a row—in about 20 years. Meanwhile, the Nasdaq Composite Index COMP, -1.07% has put in 55 record finishes, including one it eked out in a mostly subdued day of trade on Friday.

The most recent issue of The Economist highlights how breathtakingly high markets have gotten, with its cover titled “The bull market in everything.” But the British business magazine does cast a jaundiced eye at markets, asking “Are asset prices too high?” on the same page (see below):

Source: The Economist

Valuations are, of course, the trillion-dollar question. By some measures, this is the most overvalued market since the dot-com bubble and 1929 at around 31.11 times earnings. That gauge is based on The Shiller PE, a popular measure of equity values based on inflation-adjusted earnings from the previous 10 years that was devised by Nobel laureate Robert Shiller. Current levels are twice historical averages, and S&P 500 P/Es are 25.42, compared with a historical average of 15.68.

Those readings would suggest that investors are paying more for less.

Berkshire Hathaway’s BRK.A, +0.36% BRK.B, +0.07% Warren Buffett, however, makes the case—as have others—that borrowing costs, which remain historically low despite interest-rate hikes by the Federal Reserve, are one key justification for overpaying for stocks. (The billionaire investor also points to expectations for tax cuts.)

Lower rates makes owning cheaper government paper, like the 10-year Treasury note TMUBMUSD10Y, 0.701% , less desirable on a relative basis. They can also translate to lower borrowing costs for corporations, which can then deliver relatively more value to investors on lower funding outlays.

“Valuations make sense with interest rates where they are. I mean, in the end, you measure laying out money for an asset in relation to what you are going to get back, and the No. 1 yardstick is U.S. governments. And when you get 2.30 [%] on the 10-year, I think stocks will do considerably better than that. So, if I have a choice of the two, I’m going to take stocks at that point,” Buffett told CNBC during an interview on Oct. 3.

“On the other hand, if interest rates were 5[%] or 6[%], you’d have a whole different valuation standard for stocks,” he said.

The Sage of Omaha said interest rates are the stock market’s gravity, which could kill the bull-market party in a hurry.

So, is there a chance that the Fed could ramp up rates more rapidly? So far, the U.S. central bank has been lifting borrowing costs from crisis-era levels at a measured pace, due to signs of sluggish inflation and wages.

However, strategists at Société Générale, led by Arthur van Slooten, said in an Oct. 6 research note, that rate increases by the European Central Bank and Trump’s tax plans could combine to force the Fed to increase its rate of hiking.

In turn, that could put pressure on stocks, possibly yanking equity markets off a lofty perch. SocGen says valuations and low volatility are a function of the Fed’s dovish monetary policy.

Source: Sociente GEnerale

Art Hogan, chief market strategist at Wunderlich Securities, says lately questions about the integrity of this persistent, plodding, low volatility rally are what he fields most frequently from clients.

“What rolls us over? Stocks are heading into [earnings] season. a disappointment there could cause a pause in the rally or the Fed could get too aggressive in removing accommodation,” said Hogan. He doubts the Fed will be too aggressive on monetary policy.

What else could topple this record-high climb? “A real geopolitical tension escalating into more than two crazy men yelling at each other. A trade war. Both possible but more Black Swan than fundamental,” he said, referring geopolitical tensions between North Korea and the U.S.

Brad McMillan, chief investment officer at Commonwealth Financial Network, sees parallels between this current toppy market environment and the dot-com bubble of the late 1990s.

“If you look at the economics, it is extremely similar. All that we are missing is the Pets.com and we are seeing that in the initial coin offerings,” he told MarketWatch, referring to the crowdfunding craze using virtual currency.

“Are we in a bubble? Yeah, I think we are. But as we learned, it can go on for a couple of years,” he said.

In other words, enjoy the flight to new heights but know where the nearest exit is.

Which earnings are ahead?

Next week, investors will start to get a better sense of whether record levels are justified in the fundamentals, when third-quarter corporate results begin to trickle in.

J.P. Morgan Chase & Co. JPM, -0.21% kicks off earnings season on Thursday, followed by Citigroup Inc. C, -1.47% later that day. On Friday, Bank of America Corp. BAC, -0.55% and Wells Fargo & Co. WFC, +0.08% report quarterly results.

Lackluster growth is expected from financials. But the sector, as gauged by the PowerShares KBW Bank Portfolio KBWB, -0.55% , has enjoyed a 1.5% return over the past 30 days, as the likelihood of a Fed hike in December has increased. Higher rates are beneficial to the overall business model for lenders.

Read: Bank earnings: ‘lower for longer’ means buybacks will continue

What key data are ahead?

Wednesday:

The Fed’s September policy meeting at 2 p.m. Eastern Time

A report on job openings at 10 a.m. Eastern

Thursday:

Weekly jobless claims at 8:30 a.m. Eastern, with a reading on producer prices at the same time

Friday:

Consumer-price index and core CPI at 8:30 a.m. Eastern

Retail sales at 8:30 a.m.

Consumer sentiment at 10 a.m.

Business inventories at 10 a.m.