Latest news with #JimPaulsen
CNBC
5 days ago
- Business
- CNBC
If we avoid a recession, this bull has a lot of legs left, says author Jim Paulsen
Jim Paulsen, Fmr. Leuthold Group Chief Investment strategist, joins 'Closing Bell Overtime' to talk the state of the bull market and what he expects to see in the future.
Yahoo
19-04-2025
- Business
- Yahoo
The ‘smart money' index is doing something unusual right now. Why it could be a buying opportunity.
'Smart money' investors have been buying stocks pretty aggressively lately, even as the market continues to struggle in 2025. If the recent past is any guide, an indicator known as the 'Smart Money Flow Index' might be flashing a market buy signal, said Jim Paulsen, a market veteran and former top strategist at the Leuthold Group, and before that at Wells Fargo's institutional asset management arm. My husband will inherit $180K. I think we should invest the money. He wants to pay off his $168K mortgage. Who's right? 'Are we out of our minds?' My husband and I are in our 70s. Should we use $600K of our savings to buy our dream home? I held power of attorney for my late brother. Can I withdraw money from his bank account to give to his favorite charity? 'The whole thing feels predatory': My grandma, 97, pays $170 a month for a $10,000 life-insurance policy. Should we stop payments? I'm administrator of my sister's estate. Her bank won't tell me the names of her beneficiaries. Is that legal? The index, which is maintained by compares the trading action in the Dow Jones Industrial Average DJIA during two periods — shortly after the opening bell, and during the final hour of the trading day. Using a proprietary formula, the index attempts to compare activity by individual 'dumb money' traders and professional 'smart money' investors. Recently, the index has diverged from the performance of the Dow, suggesting that the smart money might be getting back into the market. The discrepancy is unusual, Paulsen said. Typically, the smart-money index is pretty tightly correlated with the direction of the Dow. The last time the two parted ways — right at the outset of the bull market that began in October 2022 —ended up being a buying opportunity, Paulsen said. Once again, the historically tight relationship between the two suggests stocks could be poised for another leg higher, Paulsen said. 'Since this bull market began on October 12, 2022, the correlation between the Dow Jones Industrial Average and the Smart Money Flow Index has been a remarkable 0.93,' he wrote, in a post on his 'Paulsen Perspectives' Substack. The theory undergirding the indicator is that trades around the open are more likely to be driven by individuals, emotion and short covering. Short covering more often takes place around the open, Paulsen said, pointing to a typical flurry of activity driven by investors forced to buy back shares to close positions that moved against them. By contrast, sophisticated traders with stronger informational advantages often wait until the end of the day to place their orders. 'The Smart Money Flow Index is essentially the difference between what smart money is doing each day less what dumb money is doing,' Paulsen said in his Substack post. Data published by trading desks at Goldman Sachs Group and elsewhere indicate sophisticated investors like hedge funds have spurned stocks recently. Flows on retail traders, meanwhile, indicate aggressive buying during every dip. See: Newer investors have been rewarded for buying market dips. That won't last forever. U.S. stocks finished the week lower on Thursday, with the S&P 500 SPX, Dow Jones Industrial Average and the Nasdaq Composite COMP all booking weekly losses, FactSet data showed. That added to the market's troubles in 2025. The S&P 500 has fallen 10.2% since the start of the year, while the Nasdaq Composite has fallen by 15.7%. The Dow is 8% lower. U.S. equity trading was closed on Friday for the Good Friday holiday. See: Is the stock market open today? Are banks closed? 'It's just not done': Why Trump firing Powell could rock U.S. financial markets Wall Street predicts a 10% stock rebound by the end of 2025. Why investors shouldn't buy the hype just yet. Wall Street's 12 favorite stocks could soar as much as 54% over the next year, analysts say My IRA and personal trading account had the biggest one-day gain ever. What will tomorrow bring? Not even the co-creator of this economic-uncertainty index can tell when the worst will be over
Bloomberg
31-03-2025
- Business
- Bloomberg
Low Correlations Among US Stocks Warn Coast Isn't Clear to Buy
A stock-market signal is flashing a warning to investors hoping for a speedy recovery from this year's sharp equity selloff. The correlation between individual S&P 500 Index members — measuring the degree to which they move in tandem — stands near the lowest level in 25 years even after rising this month, according to data compiled by independent strategist Jim Paulsen.
