How quickly emotions have changed since August. Worry? Angst? It’s already priced into the markets, according to some experts.
Last week, Barron’s published the results of its Big Money Poll, a biannual survey of professional investors and money managers. A majority of those surveyed (55 percent) were bullish about U.S. markets’ prospects through June 2016, 29 percent were neutral, and 16 percent were bearish. That’s a big shift. Last spring, just 45 percent of those polled were bullish and nearly one-half were neutral. This time around, things are different:
“After a wild and crazy summer for U.S. stocks, marked by an 11 percent correction in August, Wall Street’s bulls are showing conviction again…the pros expect stocks to rise by as much as 7 percent through the middle of 2016, propelled by a growing economy and gains in corporate profit. The Big Money investors see fresh value in beaten-up energy stocks and financials, as well as dividend-paying blue chips. And, they don’t expect a likely interest-rate hike – when it comes – to break the bull’s stride for long.”
Investors who participated in the American Association of Individual Investors’ October 14 Sentiment Survey weren’t quite so optimistic. The survey showed just 34 percent of investors were bullish, 39 percent were neutral, and 27 percent were bearish. The bulls were down 3 percent from the previous week, and the bears gained a percent. Uncertainty seemed to be the name of the game, though, as the number of investors who held neutral opinions increased by 4 percent.
As an interesting side note, the professionals surveyed by Barron’s estimated the number of investors who weren’t sure where markets are headed was much larger – 76 percent!
If you’re a contrarian – an investor who does not subscribe to popular opinion – there are a lot of opinions to consider.
|Data as of 10/16/15||1-Week||Y-T-D||1-Year||3-Year||5-Year||10-Year|
|Standard & Poor’s 500 (Domestic Stocks)||0.9%||-1.3%||9.2%||11.8%||11.4%||5.5%|
|Dow Jones Global ex-U.S.||0.4||-3.1||-0.9||2.6||0.3||1.8|
|10-year Treasury Note (Yield Only)||2.0||NA||2.2||1.7||2.5||4.5|
|Gold (per ounce)||2.5||-1.5||-4.6||-12.2||-2.9||9.6|
|Bloomberg Commodity Index||-1.4||-14.0||-23.6||-14.9||-9.3||-6.6|
|DJ Equity All REIT Total Return Index||1.2||1.2||10.7||10.7||11.7||7.9|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.