Investors Shift Focus from Bonds to Stocks in Biggest Sentiment Shift Since 1999

The "year of the bond" prediction for 2023 has been overshadowed by a surge in demand for equities, leading to a significant shift in investor sentiment. Investors are now more optimistic about stocks relative to bonds than at any point in the past 24 years. The unexpected rally in stocks has caught many off guard, with sell-side strategists revising their targets and downgrading recession forecasts. The market's favorite scenario is now a soft landing, but uncertainties remain, including the lagged effect of previous rate hikes and the possibility of a tech stock selloff. However, the shift in sentiment may endure, as corporate insiders are buying and technical indicators suggest elevated equity sentiment.