A funny thing happened as the so-called experts were looking for signs of retail euphoria (and repeatedly were unable to find it): everyone got all-in equities... and not just retail investors and US households, but mutual funds, hedge funds, pensions, systematic, and sovereign wealth funds.
As JPMorgan calculated when looking at the equity positioning of the main types of investors, "allocations are near historical highs, not leaving much room for further increases." How historic?
Starting with retail investors one can notice that margin debt (measured as percentage of market capitalization) is at its highest point ever, which includes the 2000 tech bubble episode. The percentage of US household wealth in equities is in its 94th percentile and above its 2007 peak, but slightly below 2000 levels. Sovereign wealth funds and US mutual funds are also near record levels. Pension Fund allocations appear to be in the 88% percentile, although there is some uncertainty around this number in adjusting for private asset and HF holdings. Global Hedge Funds’ allocation (as measured by equity beta) are also near record highs, and Equity Hedge funds’ allocation in their 93rd percentile (since 2005).
Why does this matte? Because with everyone already long stocks, there is no marginal buyer left, or as JPM puts it, "there is only so much the market can rally if equity investors are already near maximal allocations."
And with increasingly more traders and momentum-chasers shifting away from the manipulated arena of stock trading, and on to cryptocurrencies, one can understand why both commercial and central banks - in addition to Jamie Dimon of course, who is "richer than you äre" only as long as you trade those instruments in which he makes markets - hate the best performing asset class of 2017.