We’re a week away from the 4th of July and investor sentiment remains in the extreme optimism zone. The World Cup rolls on and the U.S. is still in contention. We’re a couple of weeks from the MLB All-Star Game. Days are actually getting shorter! Summer is definitely here.
Sentiment Remains in Extreme Optimism Zone
Despite relatively high valuations, the primary cyclical trend as we go into summer remains favorable, as measured by Big Mo and the Fed. Caution is advised; the cyclical bull is aged and investor sentiment is once again in the Extreme Optimism zone. I continue to expect a sizable summer sell-off and favor hedging equity exposure and actively managing your bond exposure in a disciplined way (i.e.: Zweig Bond Model).