A note from Citi on US equities (via Canada Globe and Mail report, may be gated) says there is more to come in the rally:
- current equity bubble is not (yet) overly large in terms of price appreciation, duration, valuation, or sentiment
- Some are disputing whether it is a bubble in the first place given the expectations of strong earnings growth
- We measure bubbles as two standard deviations over the longer-term real trend
- We therefore think the market likely has further room to run
- An inflating bubble does not mean that the Fed will not be able to cut
- CAPE ratio is not extreme yet, nor is sentiment. FOMO could create a bubble on par with the larger bubbles in the past, perhaps also given fears that it could be the last bubble before AI, rather than humans, is at the steering wheel
S&P 500 weekly candles
