Sentiment toward the equity markets has definitely got more worrisome over the last month. After 8 years of a US bull market in equities, investors are very wary that the bull can continue. People want to sell out and bank profits; they don’t want to lose them in a decline which they fear could be similar to 2008.
There’s no question there has been a “Trump trade” since the US election last November, which has seen indices rise dramatically in the US, notably in the financial and commodity sectors. The broader sectors have risen thus: Dow up 14.32%, S&P500 up 11.49%, Nasdaq up 16.49%, Russell 2000 (small cap) up 17.50%. Understandably, investors do feel light-headed, especially if they have ridden the bull for many years.
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