Investors are not buying the stock market rally

Equity investors are beginning to sound the alarm on the stock market's big gains over the last month and a half, with even longtime bulls saying the nearly 30% run may have gotten "a little ahead of itself" and away from economic fundamentals.

What they're saying: Stan Druckenmiller, the former chief strategist for George Soros, called the prospect of a V-shaped recovery in the U.S. a “fantasy” during a webcast Tuesday and said government stimulus won’t be enough to overcome real-world problems.

• Citigroup’s chief U.S. equity strategist Tobias Levkovich said he expects the economy will have problems for "the next few months" and that the bull case for stocks has been over for about six weeks.
• David Kostin, chief U.S. equity strategist at Goldman Sachs, said earlier this week that investors are dismissing significant concerns, "including $103 billion in expected bank loan losses in the next four quarters, lack of buybacks, dividend cuts, and domestic and global political uncertainty."
• He expects the S&P 500 will drop 18% in the next three months.

Watch this space: The S&P 500's rally has put the index just below its May 2019 levels but has excluded most institutional investors, who have gone to cash at record rates since late March.

• Assets in money market funds, which are effectively savings accounts, have reached a record $5 trillion after seeing inflows in each of the past 10 weeks and rising by $1.15 trillion, according to Deutsche Bank.
• And the U.S. personal savings rate jumped to 13.1% in March, the highest since November 1981.

Be smart: Bank of America's "Bull & Bear Indicator" has been stuck at 0 for weeks, suggesting investors remain extremely bearish, with 9 out of 10 calling the gains a "bear market rally" and 8 out of 10 expecting a U- or W-shaped economic recovery, rather than a V.

• Goldman's investor sentiment indicator has fallen to -1.3, also indicating extreme distaste for stocks.
• Deutsche Bank's data show three straight weeks of equity fund outflows.

Go deeper: The federal government's coronavirus response risks spiking inflation