Retail Risk Shows in ‘Dash to Trash’ Snap-Back Market Rally

Investors are flocking to the riskiest parts of the US stock market, raising questions about the sustainability of its record-setting rebound and pointing to potential losses for retail traders.

“The second quarter snap-back rally was led by the perceived lower quality baskets — the Dash to Trash,” said Mark Taylor, a sales trader at Panmure Liberum Limited. “This pointed to retail buyers continuing to buy dips aggressively and the pain trade of positioning flipping to performance chasing.”