Analysts at Berenberg told investors in a note not to chase equity markets from current levels.
The firm notes that global equities have been strong since the October 2023 lows, with +23% returns to recent highs.
"The 'Goldilocks trade' has played out nicely for equity investors," wrote Berenberg. "Macro expectations of US soft landing, moderation in inflation rates, lower interest rates and resilience or improvement in non-US economic growth were all part of the Goldilocks base case."
Initially, equity markets tracked interest rate expectations closely, but equities have continued to rally in the last couple of months as expectations of rate cuts have moderated, explains Berenberg.
They also highlight that some Fed members are now even suggesting just one US rate cut later this year.
"This 'gap' combines, with various risks, technical indicators and signals to suggest not chasing equity markets here; we would look for better entry points ahead," concluded the firm.