Wall Streets Hopium High High Not Exhausted: McGEEVER | Einsmark news

(Repeat on June 5 column without changes) by Jamie McGever Orlando, Florida, June 5 (Reuters) – In any benchmark, the recent resilience of US equities is striking, with Wall Street advancing through numerous winds to wipe out all its tariff -fired losses and move to a positive area for the year. And although these winds have not disappeared yet, the rally can still have a little juice in it. Since the low of April 7 after US President Donald Trump’s ‘Liberation Day’ tareebacle, the S&P 500 and Nasdaq are up 23% and 32% respectively. ‘Big Tech’ took the lead, with the Roundhill ‘Magnificent Seven’ ETF achieving more than 35%. On the face of it, it is striking, as many of the concerns that caused the accident – increased US import tariffs, tensions between the world’s two largest economies, and chaotic and unorthodox policies from Washington – remain today. Especially equity bulls are essentially bet that many things will go right in the coming months: The Federal Reserve will lower the rates; No economic downturn; Inflation will not rise despite the rates; US technical companies will continue to produce strong results; Fiscal concern in Washington will be moderate; And perhaps most importantly, Trump will continue to use his most aggressive tariff threats – or to use the acronym de Jour, investors assume that the ‘taco’ (Trump always chickens) will apply. These are many stars in line. Some of the biggest names in finance are skeptical, especially with regard to US fiscal prospects. The founder of Bridgewater Ray Dalio and Jamie Dimon, CEO of JP Morgan, both Falcons with a long -standing deficit, this week repeated their warnings that the US debt is not sustainable. But these calls have fallen on deaf ears, or stock investors simply think that any fiscal fallout will take years to realize. On the one hand, investors-especially the retail crowds who believe they drive this rally much optimistic. But looking at another way, US investors may not ignore the underlying risks of today, but simply see them less apocalyptic than they did a few months ago. The overwhelming negative sentiment of earlier this year paved the way for the recent setback. The sentiment among institutional investors has reached extreme levels of clumsiness in the aftermath of ‘Liberation Day’, and the fear of the recession has also barked to historically high levels, Bank of America’s April fund manager showed up. Meanwhile, May’s survey showed that fund managers in two years have the largest underweight position in US equities. If sentiment and positioning are so stretched, it does not take much to return prices in the opposite direction. If the latest American Association of Individual Investors (AAII) sentiment recording is any guide, the setback in shares still has room to manage. Pessimism on the short -term prospects for US stocks rose to an “exceptionally high” 41.9% last week, above the historic average of 31.0% for the 26th time in 28 weeks. As HSBC’s multi-asset strategy team noted this week, it is precisely because these sentiment and positioning indicators are “thoroughly in check” that the market dips are now short-lived. It is also good to remember that although Wall Street wiped out its early losses and valuations after their recent highlights, US stocks are still this year. The S&P 500 has so far only 1.5% higher than 1.5%, while the MSCI All Country World Index jumped by about 6%, which reached a peak on Wednesday. This indicates that in the coming weeks and months there may be better than a better performance for us, but of course relative value statistics can still benefit non-American markets. This does not mean that we should expect capital to start flooding in the US again. International institutional investors can continue to reconsider their allocation to US assets, creating a long -term risk for US stocks. But for the time being, local US investors are picking up the slackness. (The opinions expressed here are those of the author, a columnist for Reuters) (by Jamie McGEVER; editing by Louise Heavens)