S&P 500 record-setting week lures cash before ending with a thud

The most hated bull market ever was finally getting some love before ending the week with another bout of geopolitical angst.

Before Friday's hiccup, the S&P 500 Index closed at record highs on four consecutive days this week, something that hadn't happened since November 2014. The sudden vigour threw open floodgates for bulls, sending them into one of the biggest buying frenzies of the last 12 months, going by exchange-traded fund inflows.

That euphoria was damped after markets closed Friday when Turkey's army said it seized power and the prime minister vowed to resist, sending futures on the S&P 500 lower by 0.4 per cent. The news stoked demand for haven assets, with Treasuries paring losses and the yen strengthening. "Usually when things like this happen, people will sell first and then figure it out later," said Aaron Jett, vice-president of global equity research at Los Angeles-based Bel Air Investment Advisors LLC. "We'll have to wait and see how things unfold over the weekend."

Everything was going the bulls' way through the regular close of US exchanges, with money flowing into exchange-traded funds and active managers in equities signalling enthusiasm. Managers upped their stock market exposure to 97 per cent, the highest in history. Bullish sentiment helped push the S&P 500 up 1.5 per cent for the week, its third straight increase and the longest such streak since June.

The glut of optimism marks a shift for the bull market that began in March 2009, which had two corrections in 10 months and just ended the longest stretch without a fresh high outside of a bear market since 1985. The streak ended as economic data surpassed forecasts by the most in 18 months and monetary policy around the world remained dovish.