COVID-19 UPDATE: Meaningful Case + Hospital rises seen in the 3 border states CA, TX and AZ and also 2 other states AK + UT (new). Be wary of negative anchoring biases.

The equity markets have stalled this week, with stocks down the past two days and down slightly week to date.  The equity market has been rising, seemingly relentlessly, so a pause is pretty welcome.  But equities are still largely in the hands of buyers.  There is just simply too much cash on the sidelines.  We wanted to breakout the money market cash between institutional (left) and retail (right).  And both have stayed stubbornly high and at record levels.  So, despite the stories of retail going "all-in", this is not the case.  It is probably true that Millennial investors, via Robinhood, are trading.  But the bulk of the wealth of retail (Baby Boomers) is sidelined.

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Source: ICI and Fundstrat

And part of this cash anchored on the sidelines is due to understandable anchoring biases.  We list a few below.  The observation, in our view, is that the crash was so fast and the bounce so fierce, those who sidelined themselves just find this too "algo-nuts" and then coupling this with the risks being higher to older Americans, who happen to control 76% of the wealth, and you can see this anchoring bias.  This is very similar to 2009-2010, where homeowners (61% of USA) were structurally bearish for too long.

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