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Shopper Sentiment vs. Inventory Market Returns
I’m not a fan of most Sentiment readings. I don’t imply their present ranges, however slightly the way in which all the complicated will get used. This isn’t a brand new perception, however slightly, a long-standing pet peeve.
Sentiment readings may be improbable opposite indicators, however they’re hardly ever actionable, after which solely when at extremes.
For instance, if you wish to use the Shopper Index as Purchase sign, it has an excellent observe document for the 5 or 6 indicators it has generated over the previous 50 years. I suppose you can purchase out of the cash 1-year name choices when the extent drops beneath 60 (5 indicators: 1975, 1980, 2008, 2011, and 2022) or 65 (1 sign: 1990). It’s good for a commerce, however not a lot else.
There are just a few individuals who can do that properly, however they’re few and much between.
See additionally:
Shopper Confidence and Inventory Returns (Journal of Portfolio Administration, 2003)
Beforehand:
Massive Up Massive Down Days (Could 5, 2022)
Too Many Bears (Could 3, 2022)
One-Sided Markets (September 29, 2021)
Black Friday #Fails
Supply:
JPM Information to Markets, 2Q 2022, March 31, 2022
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