May 18, 2022

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"Too bad, it's good."  Strategists say this beleaguered stock market has one big asset on its side.

“Too bad, it’s good.” Strategists say this beleaguered stock market has one big asset on its side.

A tough month for stocks is coming to a close, and many investors likely won’t be sad to see the outcome. And the last day of April of trading looks thin as Apple and Amazon fail to raise tech earnings in a mixed season.

for us Today’s call It comes from Keith Lerner, chief market strategist at Truist Advisory Services, who said “depressed” investor sentiment is the reason he’s not turning into a fully negative stance on stocks right now.

“Actually with the markets, it’s not really about good or bad – it’s all about better or worse about the outlook. When expectations are low, a little bit of good news can go a long way. This is why markets tend to bottom when the fear is high. And uncertainty is at its most extreme,” Lerner said in a recent note to clients.

He lowered his stock position to neutral in April after two years of positive stance, noting that while the range of potential outcomes is wide, the risk/reward is less positive.

He referred to the recent survey conducted by the American Association of Individual Investors (AAII), which showed that the percentage of investors with a negative/bearish outlook rose to 59.4%. It was the highest since early March 2009, a few weeks before the bottom of a major stock was hit in the wake of the 2008-2009 financial crisis downturn.

“To be fair, investors were correctly negative in January 2008 in the early stages of that market downturn,” he said.

The percentage of bullish investors is currently at 16%, which is also close to a record low, leaving the bull/bear spread at -43%, a level that has been exceeded twice in the past 35 years – in the fall of 1990 and in March 2009. period, Lerner said. .

Real Consulting Services

A similar idea was heard from Thomas Lee, founder of Fundstrat Global Advisors, who told clients that the AAII sentiment survey was a “major bottoming signal,” based on history. “Too bad, it’s good,” he said.

He gave me this chart showing when this weak reading was pointing to the bottom of the stock:

One of Lee’s bottom notes is that the AAII poll tends to sample older investors, not the Reddit crowd.

Read: Baby boomers are leaving the stock market. This is what will happen next.

Lerner adds further evidence of investor negativity, such as the influx of $45 billion from stock funds over the past two weeks. “This is an extreme that we have also seen in times of increased uncertainty and volatility,” Lerner said.

For example: Post Lehman Brothers bankruptcy, US debt rating downgrade, COVID-19 pandemic bottom, and two months before the 2020 US presidential election. While Lehman Brothers signaled it was “premature,” strong price returns followed the periods The other, he said.

In short, Lerner said Truist takes a “weight of evidence approach,” which tells her that disappointing investor opinions and a “low hurdle to positive surprises” are the biggest running assets in the stock market.

commotion

The Fed’s preferred measure of inflation – the core personal consumption expenditures price index – rose 0.9%, as did hiring costs. Still followed by the University of Michigan Consumer Sentiment Index to emerge, we will have a Federal Reserve meeting next week.

Amazon AMZN,
-12.24%
decreased after 8% Her first loss in seven years. Apple AAPL,
+ 1.33%
It decreased by 2% after the tech giant Profits exceeded and set a revenue recordbut warned of billions in added costs from supply chain problems.

Tesla TSLA,
+ 6.25%
Stocks are up after CEO Elon Musk tweeted that there were no more sales planned at the moment, then It sold nearly $4 billion.

earnings from chevron
CVX,
-0.88%And
exon
XOM,
+ 0.21%
I left those stocks softer, while Honeywell
HON,
+ 5.10%
On the results, while Abvi
ABBV,
-10.10%And
Bristol-Myers Squibb
BMY,
-2.14%
And Colgate Palmolive
CL,
-5.25%
All are also low in results.

Opinion: Big tech companies don’t earn that much anymore, but these two stocks still look safe

Elsewhere, Intel INTC,
-5.27%
he is under After the results, while investors cheer for Roku ROKU,
+ 8.71%
profits. As Robinhood HOOD stock sank,
+ 2.80%And
Which missed expectations They said fewer people are trading on its app.

and Digital World Acquisition Corp. DWAC,
+ 7.55%And
The Special Purpose Acquisition Company That Purchased The Company Behind Former President Donald Trump’s Truth Social Is On The Rise Afterwards Trump reappears with a message on the platform.

Ukraine’s leader accused Russia trying to humiliate The United Nations fired shells at Kyiv during a visit by Secretary-General Antonio Guterres. Efforts are continuing to get the besieged civilians out of the besieged Mariupol.

China’s government has Pledge more support for its economy, as the country battles the COVID-19 outbreak.

Labor Department Concerned About Fidelity’s Plan Allowing Bitcoin in 401(k) plans is risky for retirees.

markets

DJIA stock,
-0.04%

SPX,
-0.47%

COMP,
-0.16%
be minimumwith TMUBMUSD10Y bond yields,
2.862%

TMUBMUSD02Y,
2.694%
The highest and prices of crude oil CL00,
+ 1.04%
above. Gold is rising, while the dollar DXY,
-0.36%
cold after Thursday’s Great Marchin particular against the yen USDJPY,
-0.57%And
which continues to decline. The Russian Central Bank cut interest rates to 14% and the ruble USDRUB,
-2.12%
he is bounce.

Bitcoin BTCUSD,
-1.67%
And other cryptocurrencies modestly.

graph

Naomi Ball and a team of strategists at Morgan Stanley have launched a new Market Sentiment Index (MSI) to provide “tactical guidance on ‘risk assets.’ It collects survey data, positioning, volatility and momentum to gauge market stress and sentiment.

MSCI All-Country World Index (You can track this with the iShares MSCI ACWI ACWI ETF,
+ 0.25%
) as an agent for the performance of risky assets.

“Our analysis indicates that improving/deteriorating sentiment is a stronger signal for future returns than just extreme levels,” said Paul and the team. Using the pressure level and trend, MSI is currently neutral and not yet giving buy signals, they said.

Indications

These were the most traded indices on MarketWatch as of 6AM ET:

TSLA,
+ 6.25%

Tesla

AAPL,
+ 1.33%

apple

AMZN,
-12.24%

Amazon

GME,
+ 0.60%

Jim Stop

AMC,
+ 1.98%

AMC Entertainment

NIO,
+ 6.76%

NIO

FB,
+ 2.66%

ID pads

Baba ,
+ 11.59%

Ali Baba

NVDA,
+ 1.46%

nvidia

TWTR,
+ 0.59%

Twitter

random readings

A town in southern Italy may be keeping its longevity secrets. Which All down to the food.

pet duck Help solve a murder mystery.

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