Only One Positive Left For Stocks

A tailwind for the rally over the past year has been the bearish positioning of investors, with fund managers persistently shunning equities in exchange for holding cash. Sentiment has turned bullish. Optimism towards the economy has surged to a 2-year high and profit expectations are near a 7-year high. As a result, global allocations to equities rose to a 2-year high in March and "risk appetite" is also at a 2-year high. All of this suggests the big tailwind for equities has now dissipated. The one remaining positive is the high cash balance at funds.