Fundamental investors retreat, yet quant funds keep chasing the rally! US stocks' "human-machine" divergence hits second-highest since 2020, market may face a sharp reversal.

Zhito Finance APP has learned that fund managers focused on economic growth and corporate profitability are increasingly skeptical about the sustainability of this rally in U.S. stocks. Data compiled by Deutsche Bank shows that concerns over elevated U.S. Treasury yields, the war in the Middle East, and sticky inflation have pushed discretionary investors' equity exposure to the bottom third of its historical range. At the same time, however, quantitative funds have continued to buy stocks, benefiting from the sustained rise in benchmark indices and declining volatility. The data shows that the gap between the twothe former underweight and the latter overweight U.S. equitiesis currently the second-largest since 2020.