it took a while but investors now appear to be overweight us equities according to analysts at deutsche bank for some market watchers that might underline concerns about the threat of a nearterm pullback after five consecutive weekly gains for the sp 500 that have propelled the largecap benchmark back into bullmarket territory the chart above a measure of historical positioning shows the us equity weighting is at the 64th percentile the reading isnt in extreme territory but the shift is noteworthy said deutsche bank strategist jim reid in a tuesday note the banks equity strategists have been telling us for months that investors were aggressively underweight us equities he wrote over the last couple of weeks their aggregate measure has finally moved into overweight territory whats the driver systematic trading strategies also known as algorithmic or automatic trading systems had pushed positioning higher over the first five months of the year form very underweight levels reid said but the shift over the last two weeks was driven by discretionary investors they had remained staunchly underweight until the end of may but with a selloff failing to materialize and equities rallying discretionary investors finally flipped from underweight to overweight last week and now this week to the highest since april 2022 reid wrote extreme positioning in either direction can be viewed as a contrarian indicator after all if the vast majority of investors are long stocks it raises the question of who is left to buy the opposite dynamic may apply when investors are extremely underweight as you can see were not at early 2022 levels of overweight positioning but the balance has shifted in recent weeks as fomo seems to have taken over reid said using the acronym for fear of missing out the 2023 equity market rally has been seen sucking in bearish investors who had sat out the early part of the rally the sp 500 earlier this month met the criteria for exiting its longest bearmarket since 1948 and on friday booked its fifth straight weekly gain after ending thursday at its highest since april 2022 the sp 500 is up nearly 15 in the year to date in a rally thats been fueled largely by a handful of megacap tech stocks though gains have broadened out somewhat in recent weeks the techheavy nasdaq composite has soared more than 30 so far this year while the dow jones industrial average has lagged behind up around 29 readsummer doldrums in stocks put to the test as doubts linger on more fed rate hikes stocks were modestly lower tuesday afternoon as us investors returned from a threeday weekend following the juneteenth holiday investors were awaiting congressional testimony tuesday and wednesday by federal reserve chair jerome powell after the central bank last week left rates unchanged but signaled a pair of quarterpoint rate increases likely remained necessary see confused markets get another chance to hear feds powell flesh things out on 2023 rate path this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal