The rally has broadened recently: Since the start of June, stocks other than the sexy seven megacap tech stocks have started to move up, suggesting there is more to this rally than AI hype.
One strategist says stocks, which have fallen out of favour versus bonds, could get a boost from chunkier dividends.Subramanian thinks companies are starting to prioritize efficiency in ways more prosaic than grand bets on chatbots. CapEx has roared, shooting up 14 per cent year over year in the first quarter.
Sentiment is not that bad any more: Chronert declares that sentiment as judged purely by flows into equity funds is “putrid.” But sentiment surveys tell the opposite story. The American Association of Individual Investors’ poll is now well into bullish territory, suggesting there is not much of a “wall of worry” left to climb.