Finally, there was a new record high in the S&P 500 (SPX) yesterday led by the offensive sectors and matched by some pretty good market internals. It is hard to find much wrong with the recent run, especially given the pessimism among professional investors. In our travels over the past few weeks/months, we have been highlighting the defensive nature of investors due to the potential negatives of a Hard Brexit, possible Impeachment, US/ China trade war, Hong Kong protests, and weaker global manufacturing data. Despite the potential pitfalls, the significant decline in interest rates has acted as a stabilizing catalyst for both the global economy and markets, and as a result many have been caught off guard with excessively defensive positions. How do we know? Just look at the cover of Barron’s Magazine this past weekend.

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