Sentiment Vibe Check Says More Stock Gains Will Be a Challenge
- ‘Manic’ level on BI indicator signals muted near-term returns
- BofA’s Subramanian sees risk of a pullback amid trade war
A trader works on the floor of the New York Stock Exchange.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
Twists and turns across the US stock market this year from tariff threats to DeepSeek’s AI spook have done little to shake investors’ happy-go-lucky attitude toward American equities, a potential contrarian signal for traders.
The Bloomberg Intelligence Market Pulse Index, a sentiment indicator that serves as a contrary indicator, is hovering in “manic territory,” implying muted returns for US stocks in the near term. When the gauge reached such a threshold in the past, the Russell 3000 Index proceeded to gain 1.7% on average in the next three months, a mere fraction of the roughly 9% advance posted whenever the index flashed “panic.”