Real Money Hasn’t Jumped on the Bandwagon Yet: Taking Stock

After an equity rally that’s lasted two full months, are we done for the year? There were rising voices warning that levels look stretched -- at least in the near term -- and that was even before China cut its growth target. The Stoxx Europe 600 has posted an 11 percent gain in 2019 and has been trading in overbought territory for a few days now.

Goldman Sachs strategists still have a positive view on equities this year, although they adopted a neutral stance over a three-month horizon in their latest asset allocation note. The fact is that this market rebound came after a year of extreme bearishness and record outflows, and it may need more than a China-U.S. trade deal to keep going.