Market `Melt-Up' Exposes Investor Gap, Bernstein Quants Say
- Neutral equity sentiment masks bets against safe-haven assets
- Strategists see stock volatility rising in months ahead
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This year’s market rally has revealed a schism among investors, according to quantitative strategists at Sanford C. Bernstein & Co.
In equities, indicators such as fund flows point to neutral investor confidence even as global markets set fresh records. By contrast, traders have increased short positions on assets such as gold, U.S. Treasuries and volatility that typically offer protection in the case of a stock sell-off. That behavior suggests an overall bullishness “to a degree that is becoming alarming,” according to a research note from the brokerage.