Latest news with #AAII
Yahoo
6 days ago
- Business
- Yahoo
What are the three big things in markets now? RBC weighs in
-- RBC Capital analysts highlighted three significant trends currently shaping markets in a note to clients on Monday. The firm noted that the trends include an improving 2026 EPS outlook, a sharp increase in net bulls on the AAII survey, and emerging seasonal patterns. First, "consensus expectations for 2026 are inching up for S&P 500 EPS in a broad-based way," said the bank. This is seen as a "positive data point for the stock market but a slight one." RBC explains that the embedded growth rate for the S&P 500 in 2026 consensus estimates has risen modestly, and this improvement has been "fairly broad-based," impacting both the "Mag 7 as well as the index ex the Mag 7." RBC Capital views this as a "positive data point for the broader U.S. equity market." Second, investor sentiment, as measured by the AAII survey, has shifted. "Net bulls on the AAII survey have moved up sharply, and formally entered a less robust forward return environment." While not yet negative, "the sentiment set up for the stock market is far less favorable than just a few weeks ago." Other sentiment indicators also show "some signs of a stall," including correlations within the S&P 500 inching up again and U.S. equity funds experiencing "very modest outflows." Third, seasonal trends suggest a tricky period ahead. RBC Capital says that "in recent years June and July have tended to be strong for the S&P 500 but that the transition into fall has been tricky with declines often seen in the August – October time frame." This keeps them "mindful that even if stocks continue to climb in the near-term, the transition into the latter part of the year is often tricky." They also note that the rebound off the April 8 low in the S&P 500 "continues to track the path of the rebounds off the major post GFC non-recession drawdowns," suggesting more room for recovery through year-end, albeit with potential choppiness. Related articles What are the three big things in markets now? RBC weighs in Chewy set-up into and post Q1 results is 'increasingly less attractive' Interactive Brokers hit by Citi downgrade as valuation climbs but Redburn ups PT Sign in to access your portfolio
Yahoo
04-06-2025
- Business
- Yahoo
Making sense of the whiplash in investor sentiment
Tariffs, earnings, and policy confusion have put investors on a roller coaster of emotions. In the video above, Yahoo Finance Anchor Julie Hyman takes a closer look at what Piper Sandler chief investment strategist Michael Kantrowitz calls "narrative volatility." To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. Whiplash is what you and I might call it, but Michael Kantrowitz of Piper Sandler calls it narrative volatility. He and his team have been looking at what they say are really abrupt and dramatic shifts in sentiment over time. They're doing this by measuring AAII bearish sentiment, the American Association of Individual Investors, in other words, it's a measure of newsletters and where that sentiment is blowing. So what this chart looks at is the weekly sentiment indicators that come out in the sort of blue background here, and then the standard deviation from those newsletter writers on a weekly basis, and that's a four-year rolling window. So basically, this is a way of measuring, again, what Kantrowitz calls that narrative volatility. We've looked at other times when we've seen big changes in the narrative quickly, the great moderation here in the early 90s, the tech bubble popping, when you saw low narrative volatility, then back up, and down again during COVID. But now, according to this measure, at least, they say we're at the highest narrative volatility ever. In other words, tariffs on, tariffs off, things are good, things are bad, the economic outlook is strong, no, it's not. Um, and as to what to do about it? Well, we talked to Kantrowitz earlier on about that. This is what he said. The lighter line of bearish sentiment is extremely volatile and catching the wave, you know, good luck. Anyone who could catch that wave, uh, more likely to be, uh, uh, hit by the wave than catching it. So it's not really realistic to catch these short-term risk on risk off swings in the market, and we think they will persist. So this is the norm for now, the back and forth. He talked about what has been his consistent strategy, which is to get into what he calls quality stocks here, stocks with strong balance sheets, good cash flow. Um, so we'll see if that strategy continues and also if that narrative volatility sticks around, Josh. All right. Thank you, Julie. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-06-2025
- Business
- Yahoo
3 Stocks Showing Positive Momentum Despite Trade Tensions
Wall Street may encounter volatility as trade tensions between the United States and China reignite. The United States blamed China for breaching a temporary trade deal, while Beijing accused Washington of failing to support the agreement, a telltale sign that negotiations between the countries have soured. In this uncertain situation, it's challenging to find stocks with strong uptrends, as they are mostly showing modest gains. However, by applying Richard Driehaus's investment strategy, better known as the 'buy high and sell higher' theory, one can discover stocks displaying positive momentum. To that end, Urban Outfitters, Inc. URBN, Phibro Animal Health Corporation PAHC and Strattec Security Corporation STRT are demonstrating positive momentum and defying gyrations in the broader market. Regarding the strategy, Driehaus once said, 'I would much rather invest in a stock that's increasing in price and take the risk that it may begin to decline than invest in a stock that's already in decline and try to guess when it will turn around.' In line with this insight, the American. The Association of Individual Investors ('AAII') considered the percentage 50-day moving average as one of the key criteria before creating a portfolio following Driehaus' philosophy. It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive percentage 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend. Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was made to provide better returns over the long term. To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential. • Zacks Rank equal to #1 Whether the market is good or bad, stocks with a Zacks Rank #1 have a proven history of outperformance. You can see the complete list of today's Zacks #1 Rank stocks here. • Last 5-year average EPS growth rates above 2% Strong EPS growth history ensures an improving business • Trailing 12-month EPS growth greater than 0 and industry median Higher EPS growth compared to the industry average indicates superior earnings performance • Last four-quarter average EPS surprise greater than 5% Solid EPS surprise history indicates better price performance • Positive percentage change in 50-day moving average and relative strength over 4 weeks Positive percentage change in the 50-day moving average and the relative strength signal uptrend • Momentum Score equal to or less than B A favorable momentum score indicates that it is ideal for taking advantage of the momentum with the highest probability of success. These few parameters have narrowed the universe of more than 7,743 stocks to only six. Here are three of the six stocks: Urban Outfitters offers lifestyle products and services. Urban Outfitters has a Momentum Score of A. The trailing four-quarter earnings surprise for URBN is 29%, on average. Phibro Animal Health is an animal health and mineral nutrition company with operations in the United States, Israel, Brazil, Ireland and internationally. Phibro Animal Health has a Momentum Score of B. The trailing four-quarter earnings surprise for PAHC is 30.6%, on average. Strattec Security primarily markets automotive security and access control products under the VAST Automotive Group brand in North America. Strattec Security has a Momentum Score of B. The trailing four-quarter earnings surprise for STRT is 195.8%, on average. You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge. The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out. Click here to sign up for a free trial to the Research Wizard today. Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. Disclosure: Performance information for Zacks' portfolios and strategies are available at: Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report Strattec Security Corporation (STRT) : Free Stock Analysis Report Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
The Stock Market Just Did Something Never Seen Before, but History Offers a Clue About What Happens Next
The weekly AAII Sentiment Survey has recorded bearish sentiment readings above 50% for 11 consecutive weeks for the first time in history. Pessimism often precedes stock market gains; the S&P 500 has returned an average of 16% during the 12 months following bearish sentiment readings above 50%. Tariffs imposed by the Trump administration have raised the average tax on U.S. imports to its highest level since 1941, and that will likely be a headwind for the stock market. 10 stocks we like better than S&P 500 Index › The American Association of Individual Investors (AAII) conducts weekly sentiment surveys. Participants are asked a single question: Do you feel the direction of the stock market over the next six months will be up (bullish), no change (neutral), or down (bearish)? The results are published every Thursday. Bearish sentiment has topped 50% in 11 consecutive weeks as of May 8. The stock market has never inspired such peristent pessimism at any point since the AAII began conducting surveys in 1987. The previous record was a seven-week stint during the bear market of 1990. There were also five-week stints during the Great Recession in 2008 and bear market of 2022. That puts the stock market in uncharted territory. But history offers a clue about what happens next: The S&P 500 (SNPINDEX: ^GSPC) has typically rocketed higher in the year following bearish sentiment readings above 50%. Here are the important details. The American Association of Individual Investors (AAII) started collecting market sentiment data in July 1987. Bearish sentiment has since topped 50% in only 96 of 1,971 weekly surveys, which is less than 5% of the time. Importantly, 11 of those 96 readings have come this year. That sounds alarming, but sentiment is considered a contrarian indicator because the stock market has historically performed well after periods of heightened pessimism. Put differently, investors frequently become too gloomy in response to negative news. Here's the median return in the S&P 500 over the six-month and 12-month periods following bearish sentiment readings above 50%: Median six-month return: 7%. Median 12-month return: 16%. Here's what that data implies about the present situation: The S&P 500 closed at 5,862 on February 27, which was the publication date of the first AAII survey in 2025 to show bearish sentiment above 50%. The S&P 500 will climb 16% to 6,799 by next February if its performance matches the historical median. That implies about 15% upside from its current level of 5,887 as of May 13. The stock market has been hammered by economic uncertainty created by President Trump's trade agenda. The AAII survey recorded its first bearish sentiment reading above 50% in late February after his administration announced stiff tariffs on goods from China, Canada, and Mexico, as well as duties on aluminum, steel, and auto imports. Bearish sentiment stayed above 50% throughout March and April as President Trump took a more aggressive stance on trade and other countries took retaliatory action. The most surprising development was the slate of "Liberation Day" tariffs the administration unveiled in early April, which included a 10% baseline tax and higher country-specific duties. The president also raised the total tariff on Chinese imports to 145%. Importantly, Trump has walked back several on those tariffs. The country-specific duties were paused for 90 days in early April, and tariffs on Chinese imports were temporarily lowered to about 35% (for 90 days) in early May. Yet, bearish sentiment has remained above 50% because the constant back-and-forth has unsettled investors nearly as much as the tariffs themselves. While stocks have undoubtedly benefited from Trump softening his stance on trade policy in recent weeks, investors should bear in mind the average tax on U.S. is still at its highest level since 1941, according to the nonprofit Tax Foundation. Most economists think those tariffs will raise prices and slow economic growth, potentially to the point of recession. Here's the bottom line: Investors have been persistently pessimistic since late February. Bearish sentiment has exceeded 50% in 11 straight weeks for the first time in history. On one hand, high levels of pessimism are often followed by strong returns in the S&P 500. On the other hand, tariffs still pose a potential threat to the stock market. Investors need to reconcile those opposing views when making decisions. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $613,951!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $796,353!* Now, it's worth noting Stock Advisor's total average return is 948% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Stock Market Just Did Something Never Seen Before, but History Offers a Clue About What Happens Next was originally published by The Motley Fool
Forbes
01-05-2025
- Business
- Forbes
Market Sentiment Is Down. Is It Time To Buy Stocks?
NEW YORK - JULY 16: A trader rubs his eyes outside the New York Stock Exchange July 16, 2002 in ... More New York City. The Dow closed down in seven straight losing sessions, falling more than 900 points, despite some soothing words from Federal Reserve Chairman Alan Greenspan about the economy. Investor concerns over earnings and recent corporate accounting scandals contributed to eight weeks of loss. (Photo by) Investors have endured notable pain this year, with the S&P 500 suffering one of its fastest 10% corrections over the last 50 years, then nearly tipping into a bear market. This has thrust sentiment to a lowly place — one typically reserved for the depths of a bear market or a financial crisis. Interestingly though, sentiment hits these troughs when the S&P 500 was only down about 3% from its record highs. If we look at the AAII survey, the number of bullish respondents plunged below 20% on February 26th, while bearish responses rocketed above 60%. Not only were these readings considered to be in extreme territory, but going back to 2000, breaches of these levels have typically correlated with a notable low in stocks. Extreme sentiment readings have often been a contrarian indicator. Meaning extremely bullish readings have historically been associated with a short-term top in stocks, while extremely bearish readings have typically come into play near the lows of a selloff. In other words, late-February's sentiment readings may have seemed like a great time to buy, and historically, that's been true. This time though? Not so much. At its low in April, the S&P 500 was down almost 20% from when those sentiment readings first dipped into extreme territory. So that begs the question: Is sentiment still a contrarian indicator or is it becoming a leading indicator and preceding larger moves in the market? 25-year chart of AAII bullish sentiment readings. Today's investors aren't waiting to read the newspaper to find out what's happening in markets. Real-time alerts and social media have created a world where information moves at a blazing pace, and in an era where investors can get in and out of positions with a few swipes on their phone, it appears that their attitude towards stocks can change just as quickly, too. Whether this ends up hurting or helping investors will vary. However, it's hard to view today's investment landscape without noticing that sentiment moves nearly as fast as the markets do, while the change in stock prices can drive a bulk of these sentiment shifts. Even when sentiment does sour though, retail investors are often trying to find the positives. That's as they tend to view pullbacks opportunistically, stepping in to buy during market corrections. It helps that many are becoming privy to the idea that pullbacks tend to be good opportunities for long-term investors. That buy-the-dip mentality is true during minor corrections and it's true during steeper downturns as well. We know that from recent survey work, as well as interacting with clients. A lot has changed in the markets over the years. For instance, the introduction of electronic trading, the steady flow of 401K funds, and evolving leadership groups driving stocks to new record highs. One thing that hasn't changed much over the course of history? Human emotion. While artificial intelligence, algorithmic trading and other automation tools may help stifle some of the emotional influence in markets at times — and stoke the flames at others — new highs and breathtaking declines still get a rise out of investors' emotions. Those animal spirits — like fear and greed — are as prevalent now as they were 100 years ago. In the current environment though, we're not seeing sentiment act as a contrarian indicator, it's been a leading indicator. Extreme bearish readings came into play before markets took a significant turn for the worse, and through April, they have only improved modestly. In 2022, we saw some early signs of extreme bearish sentiment before stocks ultimately bottomed later in the year, too. This plays on the idea that investors are reacting more quickly to changing dynamics in the markets. However, consider that two things can be true at once, where sentiment becomes overly bearish early in the decline before markets eventually bottom on bearish sentiment. Regardless of whether sentiment becomes a leading indicator, one thing is unlikely to ever change: Markets won't bottom on bullish sentiment.
