Say what you will but there is no denying that strength of this bull market. And big bank Morgan Stanley put it politely in saying that the stock market rally that we are seeing right now has “reached epic proportions.
“We say this not as hyperbole, but based on a quantitative perspective,” said the investment bank. “Dispersions in valuations and growth rates are among the lowest in the last 40 years; stocks are at their most idiosyncratic since 2001; and equity hedge fund beta is at its highest since March 2008.”
But what exactly is the definition of “epic” being based on? The perspective comes with the recent activity of trading that is being seen in the market recently. Morgan Stanley expand that “risk appetites are increasing” and with that, investors are capitalizing on the latest bull move. The Dow Jones Industrial Index, the S&P 500, the Nasdaq Composite Index, and the Russell 2000 all hit records this year and on multiple occasions.
Additionally, and just as another example of the epicness of this bull market, the S&P 500 saw only two of its eleven sectors in the red for the year. With volatility being almost a non issue for broader markets, investors continue to remain bullish. But it is also being realized outside of the United States as even countries like Europe are seeing a boost in stocks this year. Some even speculate that the bull market isn’t even close to ending at the moment.
“While investors have at times appeared reluctant to embrace the recent rally, there is evidence from last month that risk appetites are increasing,” wrote Morgan Stanley.
The investment bank along with many other analysts are noting that sectors that are traditionally cyclical and related to economic growth have been far outperforming more safe haven or defensive sectors. The biggest eye opener has also been shown form small cap stocks scoring more points that larger cap companies and could bode well for investors of all sizes
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