The S&P 500 edged up to another record close to start the week. Markets sit at record highs despite some earnings missteps from McDonald’s (MCD) and in the past week a number of tech disappointments (e.g. GOOG, EBAY, MSFT).
Meanwhile as David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates points out in his research note, U.S. equity funds saw an “epic” $17 billion of net inflow last month.
He writes in his July 22 daily economic commentary “Breakfast With Dave” that this “brings up the old adage… ‘the public buys most at the top and least at the bottom’”.
Asked if we’re at a market top on The Daily Ticker in the accompanying video, Rosenberg says that’s a good source of debate.
“Near-term there’s a lot of optimism embedded in the overall equity market right now,” he cites as one datapoint.
His bottom line?
“If you’re a contrarian, you sort of look at that for the near-term we’re sort of toppy,” he tells us.
Check out the video to see his explanation for why, what he expects to happen in the next few months, and what “undervalued slices” of the market he likes.
Rosenberg points out that usually the market’s up at an 11% annual rate at this part of the cycle. He says the dilemma is we’re up 19%, so it would stand to reason that this market right now is fully priced. Rosenberg thinks it’s going to be the action beneath the surface that’s going to be exciting for the next few months.
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