Strategists around Wall Street are on board with the rally, with some being forced to raise their year-end S&P 500 targets as the rally persists. RBC Capital Markets and Credit Suisse both raised their targets last week. Now, Bank of America is relaxing its defensive stance, citing an improving policy backdrop in the U.S. and signs of stabilization in Europe and Asia.
But building trust that a jump in stocks is more than just a head-fake takes time. Just as they were after the global financial crisis, memories of violent stock market volatility from last year’s end are fresh. It affects what investors actually do with their cash.
“A lot of people got hurt badly, they had one of the worst Decembers since the ’30s and worst end to the year in 10 years -- that’s a heavy burden to bear,” said Donald Selkin, chief market strategist at Newbridge Securities Corp. “People got bruised and that’s why this rally has been an unloved rally this year.”
This article was provided by Bloomberg News.