Latest news with #sentiment
Forbes
2 days ago
- Business
- Forbes
Are Cash Levels High Enough To Move Stocks Even Higher?
There were more new highs in most averages last week as the S&P closed up 2.1% in July, while the Nasdaq Composite rose 3.7% and the Invesco QQQ Trust (QQQ) gained 2.4%. The downside reversal last Thursday, July 31st, and last Friday's selling resulted in lower weekly closes. The investor nervousness was reflected in the latest AAII survey, as the bullish dropped to 34.9% from 40.3% and the bearish % rose to 43.2% from 33%. This was not consistent with some Wall Street experts who had lowered their S&P 500 targets in April but recently turned more positive. The AAII results were not consistent with results from the July survey by the BofA of the Global Fund Managers. In this report, like every month, there is often plenty of relevant data. In their July report, they reported the largest 3-month rise in FMS risk appetite on record. The FMS sentiment rose to a five-month high but is still below the 2024 post-election levels. I do not view all their survey results as contrary indicators, but many are. I take the FMS cash levels at face value, and it is one of the most valuable data points. In the recently released report, it dropped to 3.9% which, according to BoFA, is a 'sell signal'. I have found these readings to be an important measure for the stock market, and their signals often correlate nicely with other sentiment and technical readings. The sharp slide in growth stocks during 2022 caught many investors by surprise, as some have avoided the stock market for the past two years. As the tech-heavy Invesco QQQ Trust (QQQ) was moving higher in October 2021, the FMS cash level was already low at 3.9% as QQQ made new highs in November. The difference between the bullish % and the bearish % from the American Association of Individual Investors (AAII) can help identify important turning points when used with the FMS cash levels and other technical readings. As noted earlier, reading in the AAII Bull%-AAII Bear% below -30 is considered to be a sign that sentiment is too bearish as there are 30% more bears than bulls. It reached -56 at the bear market low in March 2009 low when the FMS cash level was 4.1% as it had increased from 3.9% the prior month. In November 2021, the AAII Bull%-AAII Bear% at 25% indicated that there were 25% more bulls than bears. The QQQ decline in 2022 was well defined as the rebound in April failed at $399 and the yearly pivot. The stronger rebound in August 2022 just reached the 50% Fibonacci resistance before the downtrend resumed. By early October, the yearly S2 support was reached. The AAII Bull%-AAII Bear% difference was -40, as there were now 40% more bears than bulls, and the FMS cash levels had risen to 6.3%. In my experience, when the FMS cash level is above 6% then I start to look for signs of a market bottom, which was the case in April 2025. If FMS cash levels are below 4% then I am looking for signs from the technical studies that the stock market has topped. That was the case by early January 2022, 'How Low Will We See Tech Go?'A look at the past year will help you better understand how these data points can help improve your market timing. In July 2024, the S&P 500 came close to the weekly starc+ band as it made a high of 5669 and then declined over the next four weeks to a low of 5119.26. The FMS Cash levels had been declining since the October 2023 high of over 6% In August 2024, the FMS cash level was at 4.3% and the bull%-bear% had dropped to -1 after a July reading of +30 as the four-week decline had sharply reduced the bull% in the AAII survey. By October 2024, the cash level had fallen to 3.9% as the S&P continued to move higher. The S&P 500 made a series of new highs in late 2024 and eventually peaked in early February at 6147.43. In the February 2025 survey, the FMS cash level was low at 3.5%. The bull%-bear% had peaked in late 2024 and then spiked to a brief reading of 15% in January 2025. There were 15% more bulls than bears at the February 2025 high Just a few weeks later, it had dropped below -30 and reached the -40 level in both March and April. The FMS Cash in April had dropped to a low of 4.8% and was even lower, at 4.5% in May. By mid-July, there were more bullish than bearish investors as the advance/decline analysis turned positive in early May. As we complete the first full week of trading in August, the market action has become more split. As of August 7th, the QQQ is up 0.75% while the Dow Jones Industrial Average (DIA) is down 3.6%. I will be watching for the August survey results to see if the cash levels have gone even lower, as they often top or bottom ahead of the averages.. This week, the AAII Bull%-AAII Bear% is at -8.3 after the prior week's reading at +7.3. My analysis indicates that bullish sentiment is still rising, but given the low cash levels, this may not last for long.
Bloomberg
2 days ago
- Business
- Bloomberg
Market Broadening Actually in the Works: Subramanian
00:00 Savita Subramanian of Bank of America, writing Sentiment is far from euphoric. The consensus Wall Street broker is recommending an average allocation of just 56% to US stocks. This is not euphoria. Savita joins us now. Thank you so much. Good morning. Thanks so much. Thanks for joining us. So it's not euphoria. What are we in right now? What is this world? Yeah, this world feels weird, but I think we're we're in that sort of wall of worry stage where there are certain themes that are getting a lot of credence and credibility. Like I other themes are kind of falling out of bed like GLP one, and then you've got this potential broadening of the market that we've all been waiting for with bated breath that I think is at a moment where it's, it's actually in the works. So if you if you read the transcripts and I love Lori's quote, but I think that when you read the transcripts, companies are worried, but they're also talking about the fact that they've delayed a lot of projects. They haven't canceled them. They've delayed them. That means there's a lot of pent up activity, business activity in the pipes that is likely to be unfurled over the next couple of quarters. And I think what really stymied that pickup in broadening and, you know, kind of other companies actually moving from, you know, their very low, low multiples and low, low levels is the idea that we're past a lot of the tariff uncertainty. I mean, granted, there are curveballs that are thrown at us every day, but we do know what's going on with Europe. You know, we've got a better handle on how companies can actually plan and do business. We're also starting to see, I think, the beginnings of this M & A cycle, even cross-border M & A. So I think those are other animal spirits that could unleash a broader pick up in economic activity. And then when we look at things like, you know, companies reporting, I think what's really noteworthy is that at this point, about 80% of companies have beat on revenue. That's new. We haven't seen this revenue surprise in a while. So what that means is that analyst markdown expectations very low for sales and demand and they're beating those lowered expectations. So I think this all bodes well for a broader market. I would stick with large cap value stocks, companies that are, you know, really in the penalty box but could actually start to work in an environment where, you know, we do see earnings broaden in a bigger pickup.
Bloomberg
5 days ago
- Business
- Bloomberg
South African Factory Mood Escapes Contraction Despite US Tariffs
A gauge of South African manufacturers' sentiment improved amid a sharp recovery in demand, advancing into expansionary territory for the first time in nine months despite US President Donald Trump's looming tariffs. Absa Group Ltd.'s Purchasing Managers' Index, compiled by the Bureau for Economic Research, rose to 50.8 in July from 48.5 in the prior month, the lender said on Friday. It was the first time since October that the index has pushed above the 50 level that indicates an expansion.
CNA
02-08-2025
- General
- CNA
The Spain and Ireland swimmers who grew up in Singapore
It's a sentiment Cassin agrees with. "It has so much more emotion and depth attached to it ... because this is the place that I used to call home. It definitely feels like being back home ... I wish I could stay longer."
Wall Street Journal
01-08-2025
- Business
- Wall Street Journal
Asia Manufacturing Outlook Marks Five-Year Low as Tariff Concerns Linger
Sentiment among Southeast Asian manufacturers fell to its lowest level since the pandemic, with confidence slipping to a five-year low amid trade policy uncertainty and subdued demand. This came as the region's manufacturing sector saw its first rise in output since March. The Asean PMI gauge returned to expansion in July at 50.1, slightly above the neutral mark of 50.0, compared with 48.6 in June.
