McCreath's Macro Musings - The Last Two Weeks: What Happened and What Happens Next

Even the bulls who foresaw additional upside in equities admitted stocks were far from cheap entering 2018. Then, January 2018 delivered stunning upside in US stocks, epitomized by the 15.5% advance in the FANG index, catapulting the S&P 500 deep into overbought territory at 7% and 14% respectively above its 50‑ and 200‑day moving average. Coincidentally, as shown in Figure 2, the frequency that the term “market bubble” appeared in the financial press climbed back to levels last seen during 2006 and many fund managers remained overweight equities...

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