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The S&P 500 hit a new high on Wednesday and valuations are looking stretched – but investors don’t seem to see a correction ahead.
The S&P 500 hit a new high on Wednesday and valuations are looking stretched – but investors don’t seem to see a correction ahead.
(Brendan McDermid/Reuters)

Are we in the early stages of a market ‘melt-up’?

If you’ve lost track of the number of times the S&P 500 has hit a new record high this year, and don’t care, then perhaps you are on side with observers who suspect the market is in the early stages of a “melt-up.”

That is, the market could be floating higher as it diverges from fundamentals.

Curiously, this concern has attracted both bullish and bearish observers, including Bank of America’s Michael Hartnett, Ed Yardeni, and GMO’s Jeremy Grantham.