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Market Bullish like never before, Bull enjoying the liquidity flow and swelling unprecedented manner. A record $576 billion has flown into equity funds since November -- more than the $452 billion seen in the last 12 years combined, all thanks to ultra-easy monetary policies and unprecedented stimulus.

The flows are also raising fears of a pullback from record highs, given valuations are at the highest since the dotcom bubble of the late 1990s, with the S&P 500 trading at nearly 22 times forward earnings.

Kicking off the second-quarter with the second highest earnings multiples in more than 100 years, many traditional market-top signals, ranging from retail investor surveys to valuations, are flashing amber.

Some of those worries have seeped in, with investors loading $120 billion-plus into cash funds in the last three weeks. But equity asset allocations are still at a record 63.6% however, hopes fading on bonds offering a real return, there is no alternative to stocks.

Still, many signals imply that some of the world’s biggest stock markets are ripe for a pullback.

On a technical basis, the benchmark S&P 500 and STOXX 600 are in overbought territories. Relative strength indexes (RSI) -- a 0-100 gauge of bullish and bearish momentum -- are at 70, a level that leaves them vulnerable to profit-taking.

Sentiment is also bullish. The latest sentiment survey by American Association of Individual Investors (AAII) showed retail investors are their most bullish in the past three years.

One should definitely be worried about valuations and all the more so when people start justifying extremely high valuations. Sentiment is in very worrisome territory, yet money flows continue to push indices higher, thus Bull on speedy ride.

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