“ ‘Sentiment has gotten as ebullient as we saw in early 2000. It’s all about that enthusiasm for stocks that should make somebody that is bullish call a timeout.’ ”
That’s Peter Boockvar, chief investment officer at Bleakley Advisory Group, talking to CNBC this week about what he sees as a stock market teetering at dangerous levels amid the kind of euphoria last seen during the bubbly days of the dot-com boom.
He pointed to the Citi Panic/Euphoria Model, a contrarian indicator to bolster his bearish case. As you can see, it’s getting out of whack:
“Sentiment is literally off the charts bullish,” Boockvar told CNBC, where he regularly appears as a contributor. “It typically means you are very, very vulnerable” to a market pullback.
An inflation scare, he said, could be the pin that pricks the bubble.
“The 10-year [Treasury Note] yield is below 1%,” he said. “If you get a confirmed move above 1% in the 10-year, that would be the perfect catalyst to get a pullback in equity markets that would take out some of this froth and complacency.”
Boockvar also warned, as have countless other Wall Street pundits, that there will be fallout from central banks’ easy-money policies aimed at minimizing the pandemic’s economic impact.
“In 2021, you get a vaccine and you put Covid in the rearview mirror,” he said. “And, you get this inflation story. They are going to be left very flat-footed.”
Watch the interview: