Speaking which, the mood of the American consumer has brightened a tad this month, but long-term inflation expectations were hotter than originally reported, according to the University of Michigan's (UMich) final take on March consumer sentiment (USUMSF=ECI). Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. In order to use StockCharts.com successfully, you must enable JavaScript in your browser.Click Here to learn how to enable JavaScript. The saving rate is a favorite indicator of Treasury Secretary and erstwhile Fed Chair Janet Yellen, as it's widely seen as a gauge of consumer expectations, as folks are more likely to feed the piggy bank in times of economic uncertainty. Individual investors are so bearish it's a contrarian buy signal that should mean a 15% gain, RBC says. The carrier had a meltdown in the final days of December, when it canceled more than 16,000 flights in late December. of the past 75 weeks. Signs of excessive bullishness (> 15%), however, seem to be more bullish than bearish. Their sentiment toward the market is about right: 18.6%, Bullish: 24.1%, down 3.1 percentage points, Neutral: 37.4%, down 0.3 percentage points. "Consumers' inclination to spend wasn't strong in March," writes Oren Klachkin, lead U.S. economist at Oxford Economics. Welcome to the Weekly S&P500 #ChartStorm a selection of 10 charts which I hand pick from around the web (+some of my own charts), and then post on Twitter.. Chartists can plot these indicators separately or plot the difference between bulls and bears. Compressed band width does not in itself predict direction, but traders are on alert for what could end up being a surprisingly strong IXIC range breakout. Neutral sentiment continues to be above its historical average for the 16th time out of the past 17 weeks. at 9:49 AM, The latest reading revealed there were at least 10% more bears than bulls. "The report shows inflation continues to move in the right The bull-bear spread is at an unusually low level for the seventh week out of the last 10 weeks. The past several weeks have seen the AAII sentiment survey come in a relatively tight range between the high of 24.8% on March 9th and a low of 19.2% the following week. have the potential to trigger a sharp downside spill. AAII Sentiment Survey: Pessimism Moves Closer to 50% Sentiment Survey AAII Sentiment Survey: Optimism Drops to a Six-Month Low Sentiment Survey AAII Sentiment Survey: Neutral Sentiment Above Average for 10th Consecutive Week Sentiment Survey AAII Sentiment Survey: Neutral Sentiment Above Average for Ninth Consecutive Week Asset Allocation Survey AAII Sentiment Survey: Neutral And Bearish Sentiment Rebound And Hershey isn't done raising prices. "Meta earnings show the company's commitment to cost discipline while driving accelerating N-T revenue growth and also continuing to invest in longer-term transformational technologies like AI and the metaverse," JPMorgan analyst Doug Anmuth said. The American Association of Individual Investors (AAII) is a non-profit organization focused on providing education and services to investors for assistance with investing decisions. corporations. Barclays is still eyeing Activision Blizzard stock despite the collapse of the company's deal with Microsoft. Chart Technical Indicators documentation | ChartMill.com The Chicago Purchasing Managers' Index (PMI) delivered a reading of 48.6, 5.1 points north of expectations, Elsewhere in the report, personal income grew by The Nasdaq Composite led the way with a 2.5% gain. Meanwhile, the company's metaverse venture Reality Lab recordedalmost $4 billionin operating losses. rise over the next six months, dipped by 3.1 percentage points EDT/1440 GMT). quarterly results but warned of a. economic data showed This week's AAII Sentiment Survey results: Bullish: 26.9%, up 10.4 percentage points Neutral: 20.3%, down 3.9 percentage points Bearish: 52.9%, down 6.5 percentage points Historical averages:. KLA Corporation was among the notable names boosting the Nasdaq Composite during midday trading. The two stocks were the worst performers in the 30-stock index, with Merck shedding around 1.5% and Caterpillar sliding just over 3.2%. This is the first time in the survey's history, pessimism is above 60 . Several analysts hiked their price targets following the release. The employment cost index (UEMPC=ECI), which aggregates wage and benefit growth, rose by 1.2% in the first quarter versus the 1.1% consensus. Neutral sentiment continues to be above its historical average for the 16th time out of the past 17 weeks. She also bought 27,481Tesla shares forArk Next Generation Internet ETFWednesday. On Monday, analysts also expect the Institute for Supply The strategist said the S & P 500 has climbed 15% on average in the 12 months after a threshold of negative 10% is crossed in its gauge, which looks at the four-week average of the Bull/Bear spread of individual investor sentiment. Merck shares advanced 1.5% in the premarket after the health name beat analyst expectations in the first quarter. The market quickly recovered and went on to new multi-year highs soon after. Management's nationwide PMI number to show a shallower monthly and benefit growth, rose by 1.2% in the first quarter versus the In other words, the story remains in which sentiment has been unshakably bearish. Facebook parent company Meta's better than expected quarterly results has spurred further analyst optimism. An investor who is using technical analysis to look at market sentiment will analyze a mix of patterns, indicators and signals. only to surge back as much as 2.2% on Thursday. These are terms that help investors measure the mood and tone of market sentiment, which we delve into later. France's CAC 40 was 0.3% higher at 10:15 a.m. Paris time, while Germany's DAX was flat and the U.K.'s FTSE 100 was 0.05% lower. Next, employment costs - one of the main drivers of "The report shows inflation continues to move in the right direction," says Peter Cardillo, chief market economist at Spartan Capital Securities. AAII members answered a special question this week that asked "if they think investors are too bullish or bearish right now." As a result, net bull-bear percentage plunged to -16.90%, the first negative reading since September 2020. In the analysis below, I explain what the AAII survey is, before exploring whether stands up as a reliable contrarian indicator. by 0.3 percentage points to 37.4%. In last week's survey from the American Association of Individual Investors (AAII) the bullish % dropped sharply to 24.9% from 32.8% the prior week. Shares of beleaguered regional bank First Republic were climbing on Thursday, giving the stock a reprieve after two days of heavy selling. Southwest Airlines The airline company's shares slipped 3.4% followinga wider-than-expected lossfor the first quarter. "Consumers' inclination to spend wasn't strong in March," *****. Shares of Caterpillar moved into the red in premarket trading despite initially popping following earnings results. seen as a gauge of consumer expectations, as folks are more AI remains a buzzy topic for both investors and corporations. The report also showed stronger-than-expected inflation, with prices increasing 4% compared with a consensus estimate of 3.7%. With this, both But the Nasdaq has lagged on a month-to-date basis, shedding 0.7% while the Dow and S&P 500 rose 1.7% and 0.6%, respectively, since April began. Global economy barometer Caterpillar reported much better than expected first-quarter results Thursday morning. First Republic's stock closed at $16 per share on Monday before the bank released its first quarter results, which showed that deposits shrank by about 40% in the first three months of the year. Market sentiment indicators are psychology-based ratios or calculations that attempt to quantify investor mood toward the market in order to predict how current beliefs and positions may affect future market behavior. It is human nature to take investor sentiment into account when making investment decisions, even if it's not always accurate or data-driven. that the Fed needs to take into consideration." (AAII data) Sentiment votes: - 24% bullish - 37% neutral - 38% bearish (Highest for all of April) $MACRO We refer to this question as the AAII Sentiment Survey. Its stock plunged and its credit default swaps a form of insurance for a company's bondholders against its default soared. The chart below shows the SPX along with the percentage of bulls in the AAII survey, minus the percentage of bears. Similar pullbacks in 2005 saw somewhat bearish sentiment, but not the extreme seen in 2006. hb```f``b`2^21 Py)%+28\/ "The market was looking for vulnerabilities in banks with this surprise out of the U.S. regional banking sector. The green bars represent the percent of respondents who were bullish, while the red bars show the percent of bearish respondents. Upgrade now. Adopting a contrarian investing strategy takes time, research and understanding of market indicators. Pessimism among individual investors stayed above average for the 10th consecutive week in the latest AAII Sentiment Survey. The weekly American Association of Individual Investor survey, which polled individual investors of their thoughts on where the market is heading in the next six months, has indicated a level of bearishness that's close to the level during 2008, RBC said. think one is on the way." The report date for the last survey was last Wednesday, when the S&P 500 Index (SPX) closed less than 1% away from its all-time high. Here's a look at core PCE along with other major indicators, and the distance they have yet to fall before approaching Powell & Co's average annual 2% target: Elsewhere in the report, personal income (USGPY=ECI) grew by 0.3%, overshooting the 0.2% consensus, while consumer spending (USGPCS=ECI) was unchanged from February. What Helps and Doesn't Help Find Top-Performing Stocks, O'Shaughnessy: Growth Market Leaders Screen, AAII Sentiment Survey: Pessimism Remains Above Average for 10th Consecutive Week, AAII Sentiment Survey: Pessimism Stays Above Average for Ninth Consecutive Week, AAII Sentiment Survey: Pessimism Stays Above Average for Eighth Consecutive Week, Using the AAII Sentiment Survey as a Contrarian Indicator, Analyzing the AAII Sentiment Survey Without Hindsight. The S&P 500 added 2%, while the Dow rose 1.6%. Pessimism among individual investors stayed above average for the tenth-straight week in the latest American Association of Individual Investors (AAII) Sentiment Survey. The company reported $1.40 in adjusted earnings per share, eight cents more than anticipated by analysts polled by Refinitiv. Thursday at 11,855, as well as Tuesday's low at 11,798, and the Eight of the 11 sectors were trading up in what's so far been a winning day for the index. The cancellations resulted in a $325 million revenue hit. likely to feed the piggy bank in times of economic uncertainty. The selling among individual investors reached a new milestone as of late. US AAII Investor Sentiment Survey | MacroMicro CLICK HERE, <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ The spread of bulls to bears has only been this negative (-43%) one other time in the last 25 years, and that was at the 2009 market low. additional hurdle - a push for onshoring, or moving production from a supply side issue to actual demand-side inflation the The bull-bear spread (bullish minus bearish sentiment) decreased 6.5 percentage points to -14.4%. That is only the fifth. AAII sentiment gauge gets historically bearish (NYSEARCA:SPY) AAII stands for the American Association of Individual Investors. (Stephen Culp) Roku lost $1.38 per share, while analysts had expected per-share losses of $1.37. Since then, there have been 143 other instances where the bulls minus bears line went from above the -10% line to below it. AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, rose 3.4 percentage points to 38.5%. finance blog, Bespoke provides timely investment ideas through its Bespoke Premium (http://bespokepremium.com/) subscription service and also manages money (http://bespokepremium.com/mm) for high net worth individuals. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. As mentioned above, market sentiment analysis is not an exact science; therefore, investors should approach the labels associated with sentiment with caution. Meta beat Wall Street estimates on both adjusted earnings per share and revenue on Wednesday, despite concerns over slower ad sales. US Investor Sentiment, % Bearish Chart stay essentially unchanged over the next six months, edged down The 2008-2009 observation is perhaps the most concerning, because the first leg down in the first quarter of 2008 saw a very similar pattern of bearish sentiment. CAN AI HELP SOLVE THE ONSHORING INFLATION PROBLEM? With these changes, the bull-bear spread widened to -14.4 percentage points from -7.9 percentage points last week. We were tested, and I think the silver lining of the test is we passed, and I think we passed with flying colors," Deutsche Bank CFO James von Moltke told CNBC. Ebay earned an adjusted $1.11 per share, better than $1.07 estimate, and revenue of $2.51 billion, against a $2.48 billion estimate, according to Refinitiv data. Consumption Expenditures (PCE) report for March , and individual investors. The current chart looks like this: The green bars represent the percent of respondents who were bullish, while the red bars show the percent of bearish respondents. With this, both optimism and neutral sentiment declined. The Sentiment Survey is a contrarian indicator. Let's bring in 20 more years of data, which will take us back to the late 1990s. Caterpillar shares gained 3.5% in early trading. I am not receiving compensation for it. mentions in earnings calls skyrocket this season. I was taught that investors tend to be excessively bearish at market bottoms and overly bullish at market tops. A 30-year mortgage rate near 7% has provided a substantial impediment to the industry, as has a generally slowing economy and lack of supply. On Thursday, the Composite's daily Bollinger Band (BB) width ended at its tightest reading since August 25,2021. Every week, AAII members are invited to cast a ballot of bullish, neutral or bearish on stocks for the next six months. The November 2019 dip below -15% preceded the stock market plunge in December 2019 and the February 2017 dip preceded a correction the next six weeks. progresses. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Stefan Rust, founder and CEO at data aggregator Truflation. consumer discretionary is the weakest. Honeywell, an industrial bellwether, added more than 4% on the back of a quarterly report that was better than Wall Street expected. (1000 RT @MortensenBach: Bearish sentiment keeps rising! Visually compare against similar indicators, plot min/max/average, compute correlations. We delve into the history and calculation of the AAII Sentiment Survey, as well as what market sentiment analysis aims to measure, what bearish versus bullish indicators are and how to use market sentiment to invest. The bearish reading of almost 60% was only seen at the 2003 market low, the 2006 pullback, and much of 2008 going into the 2009 market bottom. Retail investors have been dumping equities in the face of raging recession fears that have been stoked by rate hikes and a banking crisis. the last 10 weeks": AAII noted that market volatility continues to worry To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. On Monday, analysts also expect the Institute for Supply Management's nationwide PMI number to show a shallower monthly contraction in March, with consensus calling for a half-point improvement to 46.8. But Ian Shepherdson, chief economist at Pantheon To arrive at that conclusion, I looked at when the bulls minus bears line fell below the -10% mark, and the SPX was within 2.5% of an all-time high. KLA climbed more than 5% after the semiconductor equipment maker's latest fiscal third quarter results beat estimates on the top and bottom lines, according to consensus estimates from FactSet. FOR FRIDAY'S LIVE MARKETS POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE, Top website in the world when it comes to all things investing, Rating from 1M+ reviews. This market sentiment data is compiled and depicted below for individual use. Market sentiment should be one indicator to analyze, but not used in isolation by itself. "There were a handful of weak semiconductor reports Wed night (includingMXL and WOLF), butthis quote from MBLYis spooking people the most "The China electric vehicle market has been negatively impacted by meaningful pricing actions by a global EV OEM, reduction of government electric vehicle subsidies, and general economic weakness in the country," Crisafulli said in note on Thursday. Some cryptocurrency sentiment indexes also consider volatility and volume, as well as activity in the general media and on online forums. The firm did post a wider than expected loss for the quarter, however. Bearish sentiment is above its historical average of 31.0% for the 70th time out of the past 75 weeks. the upper daily BB, now around 12,285, will have potential to The company canceled more than 16,000 flights in the final days of December 2022 due to software and scheduling issues. My weekly investment routine involves a review of key sentiment indicators every Thursday. Note that the remaining 38.3% are neutral. The tech stock was last up more than 15%. at a much shallower pace this month than economists projected. Individual investor pessimism toward stocks rose to 38.5% from 35.1% in the latest weekly survey, the 10th week in a row bearishness is above its historic average of 31%, the American Association of Individual Investors said. Optimism is unusually low for the 49th time out of the past 69 weeks. Unless otherwise indicated, all data is delayed by 15 minutes. After an occurrence in which the index was farther away from an all-time high, the SPX averaged a gain of 1.42%, with 68% of the returns positive. flat for the week, shorter-term volatility has certainly picked In comparison, cryptocurrency sentiment showing a high level of greed would indicate that investors are investing more of their money, which could potentially mean that the market is due for a correction. Crude oil prices fell earlier today, starting the week with a decline on expectations of another rate hike by . The spread is at an "unusually low level for the seventh week out of the last 10 weeks": AAII noted that market volatility continues to worry individual investors. 86 0 obj <>stream U.K. regulators blocked the deal on Wednesday, citing concerns over competition in the industry. There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Neutral sentiment is above the historical average (31.5%) for the 16th week in the past 17, the AAI said. The AAII Sentiment Survey offers insight into the opinions of individual investors by asking them their thoughts on where the market is heading in the next six months and has been doing so since 1987. Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. If you have an ad-blocker enabled you may be blocked from proceeding. But a review of the AAII survey data over the last 25 years shows that this has indeed occurred but only some of the time. *, U.S. 10-Year Treasury yield slides to ~3.44% <<. Instinctively, I would expect the implications after a signal to be more bullish after it occurs closer to a record. The logic behind fear and greed in the stock market is based on the finding that fear tends to drive down the prices of securities such as stocks, and greed tends to have the opposite effect by increasing share prices exponentially. Jan 19, 2022 Here are their responses: Their sentiment toward the market is about right: 18.6%, FED UP: PCE, EMPLOYMENT COSTS, UMICH, CHICAGO PMI (1205 EDT/1605 GMT). used nearly twice as frequently in this quarter's conference Transaction Status, Reset (Terence Gabriel is a Reuters market analyst. Revenue came in at $29.69 billion, above the consensus estimate of $29.3 billion. Stocks rose despite weaker-than-expected GDP data, which may suggest to some investors that the Federal Reserve could soon wrap up its tightening campaign. Analysts Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. As you can see, the sentiment remained excessively bearish for over a year, culminating in the quite negative readings in March 2009. Fidelity National Information Services The financial products company's stock climbed 3.5% on the back of better-than-expected first-quarter results. costs. Revenue increased 17% from the same quarter a year ago. expressed are his own), Refining Don't waste another second join us right now before the next trade is released! No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Though both beat Wall Street expectations, both were down as investors parsed management commentary and share prices. But the fallout could deter company's from making similar attempts, which can bring negative consequences to EA. Here are their Given that tech accounts for nearly 30% of S&P 500 market cap, it would appear that market fireworks are not far off. Gains were led by Microsoft MSFT, Apple AAPL and Exxon Mobil XOM. Optimism is "unusually low for the 49th time out of the past 69 weeks.". The Commerce Department released its broad-ranging Personal "Across the various dimensions, when the market took a good look at us, what they saw was a stable, well-run, well-risk managed bank," von Moltke said. The Schaeffers team has over 41 years of options trading success targeting +100% gains on every trade. You can share your thoughts with us at. After rising to 27.2% last week, only 24.1 . Get our unique market analysis and news delivered straight to your inbox, Unique market analysis and news directly in your inbox, critical trading analysis before the market opens, midday check-in on the days trading session, complete trading day summary after the market close, quick rundown of last weeks trading sessions, BREAKING NEWS: Stocks Inch Lower After Volatile Start to May, >> PODCAST: How are your investing goals of 2023 going?