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The North Korean military has decided to hold off on attacking the island of Guam for now, state media has said. The report from North Korean news agency KCNA said leader Kim Jong Un would watch the U.S. response before making any decision on whether to attack the territory that is of vital importance to the American military.

It would be premature to call this a major step forward, as we still don't know what might happen when the U.S. holds major military exercises with its allies in the region later this month. These drills are held annually, but never at a time of such high tension between the DPRK and the U.S.

Regardless, world equity markets rallied again today and shook off the tensions with surprising ease, taking any sign of deescalation as a cue to carry on as normal. It seemed as if the market was at a tipping point last week, but the robust rally this week suggests a lot of investors think otherwise. Many analysts are trying and failing to call the top of the market. With stock prices consistently moving higher rapidly, it has proven impossible to predict when it will end. Are we due for a big reversal? Have equity markets got plenty more left in the tank? Only time will tell.

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