Deutsche Bank on US equites:
- We are in rarefied air in terms of the relentless risk rally since the end of October.
- the S&P 500 has now been up for 15 out of the last 17 weeks … the first time since 1989 that’s happened, and before that you’d need to go back to 1972 for such a run
- If we get yet another advance this week, it would be 16 out of 18 for the first time since 1971, the joint record in an 18-week run.
One for the record books. So, pull back time? Perhaps not. DB go on:
- Interestingly, looking at all such 15/17 week runs, the median price performance in the next 13 and 26 weeks is +2.0% and +5.5%, respectively, which are both high relative to an annual price move of around 6% over the last 100 years. So there is no specific evidence, from history, of mean reversion once you see one of these runs.
In a separate note from DB, analysts say that inflows to equities over the past 5 weeks have been the strongest in 2 years, around USD75bn, and:
- inflows to bond funds ($15.2bn) this week also accelerated to the
highest in 13 months and were broad-based