With sentiment improving and some inflation data coming in softer, is there a setup for a year-end 'melt-up' in equities, especially if retail participation increases? Or are we still facing too many macro headwinds?
If earnings continue to surprise positively, then absolutely. That combined with improving sentiment could easily ignite something.
A melt-up is possible, but I'm not convinced retail can move the needle enough on its own. Institutional money will dictate the real direction.
What about the technicals? Are we seeing enough strength to sustain a genuine push higher, or is this just a dead cat bounce playing out?
Retail participation is key. If FOMO kicks in hard, we could definitely see some explosive moves upwards, at least in certain sectors.
Hard to ignore the macro headwinds like rate hikes still on the table. A melt-up feels more like wishful thinking right now than a probable outcome.