Are U.S. stock-market investors getting dangerously complacent? Or is the expectation-defying 2023 rally due to continue?
See: Wall Street expects S&P 500 to finish 2023 at 4,000 after missing mark by the widest margin since 2008 Technically, an equity index is said to exit a bear market once it has risen more than 20% from its latest lows, though a 2022 exit from a bear market proved to be a head fake. “This is the most hated 7-month, 20% rally ever,” Lee said in a note to clients. Others, including a team at JPMorgan Chase & Co., have argued that investors should consider reducing their exposure to stocks.
“One side of the market is very sunny, while the other is crying for help. The technology and the largest companies in the market are doing fabulously well, while the manufacturing and banking portions of the markets are struggling. The largest companies are up over 20% this year, while the smallest are down a bit,” Nolte said.
Some worry that such low volatility in the face of so many risk factors means investors are getting complacent.