We see four valid explanations for the current decoupling between the U.S. equity market and economic fundamentals.

• Diverging expectations in the shape of economic recovery and economists’ consensus.
• Diverging earnings expectations among sectors (technology) or stocks (FAANG).
• “Pavlovian markets” only reacting to announcements of expansionary monetary and/or fiscal policy.
• A technical rally, the momentum of which comes from the “new retailers” and is reinforced by systematic investment strategies.

We consider the last two arguments are the most convincing. New retail investors’ expectations are formed in different peer groups than those of professional or experienced retail investors: it is not financial media that prevails but social (lifestyle networks). The investment behavior of the "new retailers" shows an alarming extent of risk-taking (consciously or by lack of financial literacy) not least by the extensive use of derivatives. In certain market segments, "new retailers" have already become very significant (distressed equity, penny stocks). The current U.S. equity market conditions seem fragile to us due to the decoupling from fundamentals and the highly speculative investment rationale, as well as the regulatory and operational risks.