Stock Bears Outnumber Bulls for First Time Since April '09
July 14 (Bloomberg) -- Nicholas Bloom, a professor of economics at Stanford University, talks with Bloomberg’s Julie Hyman about the outlook for U.S. stocks and the global economy. (Source: Bloomberg)
The level of bullish sentiment about the U.S. stock market fell below the level of bearishness for the first time since April 2009, according to a survey of newsletter writers.
The proportion of bullish publications tracked by Investors Intelligence trailed bearish ones by 2.2 percentage points, declining to 32.6 percent, the lowest level since March 2009. Individuals’ optimism about equities also fell to its lowest level since March 2009, 21 percent, according to a survey last week by the American Association of Individual Investors. The Standard and Poor’s 500 Index has rallied 7 percent from July 2 through yesterday.
Some analysts regard investor sentiment as a contrarian indicator and believe increased pessimism is a sign the market is poised to rebound. Barton Biggs, the hedge-fund manager who was among the first investors to turn bullish at the start of the bull market in 2009, said July 2 that he slashed his equity holdings in half that week. The S&P 500 has rallied every day since then.
“It swings a little too much to one side, and we have a rally,” Peter Boockvar, an equity strategist at Miller Tabak & Co.in New York, said in an interview.
The Investor Intelligence survey is typically a lagging indicator, said Michael Burke, co-editor at New Rochelle, NY- based Investors Intelligence.
“Probably next week people will get a little more bullish,” he said in an interview. “We’re in the earnings season now, and that’ll make people a little more optimistic.”
The following are results from Investors Intelligence’s analysis of investment newsletters for July 7 through yesterday.
This Week Last Week Comments
Bullish * 32.6% 37.0% Lowest level since March 2009
Bearish # 34.8% 34.8% Stays at highest in 12 months
Correction & 32.6% 28.2% Biggest jump since January
* The bullish reading fell to 22.2 percent in October 2008,
the lowest since November 1988.
# The bearish reading fell to 15.6 percent in December
2009, the lowest since April 1987. It rose to 54.4 percent in
October 2008, the highest since December 1994.
& The correction reading rose to 39.8 percent in February
2010, the highest since September 1983.
To contact the reporter on this story: Caroline Dye in New York at cdye@bloomberg.net
Rate These Stories
Rate this Page