Eq: Total Market

(New York)

Wall Street is getting behind the stock market in a way that is atypical for the current environment. Following a big fall in stocks, banks and analysts usually get shy about calling a rally and generally stay neutral or call for further losses. However, following the best two consecutive trading days since February, they are getting behind stocks with unusual vigor. For instance, JP Morgan’s all-world analyst said that the “rolling bear market” might turn into a “rolling squeeze higher” and that “the potential for a violent upside rally is substantial”.

FINSUM: We are not as optimistic as Wall Street, but certainly don’t feel gloomy about the market given the strength of earnings and the economy.

(New York)

The market seems to have finally regained its footing after a very turbulent couple of weeks. This selloff felt different than any in recent memory and serious damage to the market’s psyche seems to have been done. But what might it say about the wider economy? The answer is little, according to the Wall Street Journal. The selloff will probably be just that, a market fall. In reality, tech companies, which led the losses, reported very solid earnings, with margins expanding very well. Little can be drawn from the results that might show the economy is in trouble.

FINSUM: The only aspect of this selloff we are somewhat worried about is how it might impact consumer confidence and spending this holiday season. However, so long as the market stays strong this month, we expect the impact to fade.

(New York)

For many years the prevailing mantra in the equity market had always been “buy the dip”. Every time the market fell, investors bought the dip and encouraged others to do so. However, that approach seems to have disappeared in the carnage of the last couple of weeks. Whereas falls used to be followed by rallies that pushed the market higher, the last few weeks has been characterized by more sustained losses with shallower rallies. Nordea Asset Management’s chief strategist sums up the mood change well, saying “We’ve seen a shift from buying on dips to selling into strength … We’re increasingly moving from glass half full to glass half empty; that’s the narrative here”.

FINSUM: We think that view sums it up well. While we do believe stocks won’t enter a bear market right now because earnings and the economy are solid, we sense that something in investors’ psyches has fundamentally changed.

Page 73 of 90

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…