Getting mighty crowded – searching for market elbow room: Mike Dolan

Getting mighty crowded – searching for market elbow room: Mike Dolan

But they have been doing so for several months and even the so-called 'normalisation trade' got well underway after last month's vaccine breakthroughs prompted rapid sectoral rotations from pandemic winners to laggards.Now the worry is that everyone is leaning the same way - always a red flag about over-exhuberance or excessive pessimism. Bank for International Settlements economist Claudio Borio on Monday warned about runaway markets, "over-stretched valuations" and the sheer amount of "daylight" between credit spreads and inevitable solvency risks ahead.The most obvious equity market anxiety - what Amundi's chief investment officer Pascal Blanque last week described as a "perfect bubble" - is Big Tech, the collection of 6-10 digital giants, including Amazon, Apple, Alphabet, Microsoft, Facebook and Netflix, that have led the stock market higher for years.Perhaps the vaccine rotation will let the air out of this balloon gradually as a broader equity rally emerges. But Big Tech has already brushed off crowding fears for years.Bank of America's monthly survey shows "long U.S. Tech and growth" was identified by fund managers as the most crowded trade for the seventh straight month in November and in all but two months of the past year. Big Tech also surfed through 10