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Opinion
John Authers

Are Animal Spirits Running Into a Dumb Money Trap?

Rising confidence is coming from many sources, but it’s also crossing a key threshold suggesting traders have lost their heads.

Bear markets regularly include deceptive rallies, but sentiment is driving a forceful advance.

Bear markets regularly include deceptive rallies, but sentiment is driving a forceful advance.

Photographer: Michael Nagle/Bloomberg

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For some reason, people are feeling good. Animal spirits are on the run. For one dramatic illustration, if we use the popular (but wildly over-simplistic) definition that any 20% gain is a “bull market,” the NYSE Fang+ index is back in a bull market. The index includes the big hegemonic internet platform companies and has been creamed since peaking late last year, but it has now made up that much room since hitting bottom in May: