A note from Deutsche Bank on Monday airs some reasons to be concerned about the lofty heights of US stocks.
- “It’s rare to see a rally this fast, and when they happen it’s usually because the economy is emerging from recession and the stock market has just been through a slump”
- “The only time in post-war history that this wasn’t the case was during the dot com bubble.”
DB says usually after a strong rally the S&P 500 continues higher for another 6 to 12 months, but the difference now is that:
- the economy has not bounced out of a recession
- the stock market rally over the past year “has been unusually narrow by historical standards”
One for the record books indeed
