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Illustration: Aïda Amer/Axios

The stock market's sell signals keep mounting but the prices keep rising, leaving investors wondering just what comes next.

What's happening: Signs of euphoria abound, suggesting the market is getting overheated — a classic sell sign. But in a market underpinned by the Federal Reserve's limitless money printer, dip buyers have continued to step in and markets are piling on risk.

By the numbers: The S&P 500 has risen 87% since its low on March 23, 2020, adding $50 trillion worth of value to the index in just over a year, the best 12-month rally since the 1930s.

  • Investors have continued to lever up to plow money into the stock market, borrowing a record $823 billion against their portfolios as of March, according to data from the Financial Industry Regulatory Authority.
  • That's a more than 72% year-over-year increase.
  • The numbers have continued to climb further above January's record of $799 billion.

Where it stands: At the beginning of April, the amount of money that had flowed to stocks globally over the past five months had exceeded the inflow seen over the prior 12 years by well over $100 billion, according to data from Bank of America Global Research.

The big picture: The sea change in psychology means more investors are making increasingly risky bets and putting more of their money into stocks.

  • Retail traders also are growing their influence in the market, another classic sign a bubble is about to pop.
  • Mom and pop traders now account for almost as much trading as all hedge funds and mutual funds combined, FT reports.

Watch this space: Institutional investors, company insiders and hedge funds are all starting to sell.

  • BofA's data show last week its clients had the largest outflows in five months and the fifth-largest on record. Retail clients were the only net buyers.
  • The ratio of company insiders, like CEOs and other top executives, who are selling versus buying stock in their companies is hitting extreme levels, as the insiders unload positions.

Yes, but: Selling has proved to be 2021's riskiest wager, Bloomberg notes. The S&P 500 has yet to decline by more than 5% this year and has now gone 211 days without such a decline, per Reuters.

  • Excluding the S&P's five best sessions, the index’s 11% year-to-date gain has been only 2%.
  • That's highly unusual: The S&P 500 has declined at least 5% every 177 calendar days, Sam Stovall, chief investment strategist at CFRA, told Reuters.

The bottom line: "To try to guess that this is the right time to be out of the market, you may as well go to Las Vegas," Mark Stoeckle, chief executive at Adams Funds, told Bloomberg. "Here’s just as much risk doing that."

Go deeper

Debt investors retreat from funding dirty energy

Illustration: Sarah Grillo/Axios

Banks are coming under fire from all sides for their role in funding fossil fuel companies, even though most have pledged to pull back over the coming decades.

What's happening: Despite pressure from activists, shareholders and Democratic politicians to finally divest from carbon-spewing businesses as the planet warms, the biggest American banks are still energetically backing dirty energy.

Federal judge says Florida ban on "sanctuary cities" racially motivated

Florida Gov. Ron DeSantis. Photo: Joe Raedle/Getty Images

A federal judge on Tuesday struck down parts of a Florida law aimed at banning local governments from establishing "sanctuary city" policies, arguing in part that the law is racially motivated and that it has the support of hate groups.

Why it matters: In a 110-page ruling issued Tuesday, U.S. District Judge Beth Bloom said the law — signed and championed by Gov. Ron DeSantis (R) — violates the Constitution's Equal Protection Clause because it was adopted with discriminatory motives.

Biden steps into the breach

Sen. Joe Manchin heads to a meeting with President Biden today. Photo: Kevin Dietsch/Getty Images

President Biden ramped up the pressure on his fellow Democrats Wednesday, calling a series of lawmakers to the White House in the hope of ending infighting and getting them in line.

Why it matters: Divisions within the party are threatening to derail Biden's top priorities. After several weeks of letting negotiations play out, the president is finally asserting his power to ensure his own party doesn't block his agenda.