How Much Higher Can This Monster Market Meltup Go: One Bank Lists The 4 Hurdles Straight Ahead

In retrospect, the capitulation took place two weeks ago: that's when, as we reported at the time, bearish hedge funds finally threw in the towel, and after 8 weeks of consistent, relentless selling, the "smart money" capitulated, and bought stocks at the fastest pace since 2021 (one week later, the trend only accelerated as "Hedge Funds Buy Most Stocks Since Dec 2023") leading to the best YTD rally this century!

The rally has been so ferocious that even banks are starting to point out that it is starting to stretch credulity with Deutsche Bank's Henry Allen writing that "the cross-asset rally is becoming increasingly relentless. The S&P 500 has posted 6 consecutive weekly gains for only the second time since the pandemic, and has seen its strongest YTD performance since 1997. In credit, last Thursday even saw US IG spreads reach their tightest since 2005. Sovereign bond spreads have tightened too, with the spread of Italian 10yr yields over bunds at the tightest since November 2021."