Sentiment – Risk Appetite and Expected U.S. Equity Market Performance Risk appetite among U.S. equity fund managers remains positive but has cooled, with many bracing for a June pullback and only modest gains through year-end as concerns over higher interest rates and recession risks build. Image: S&P Global Market Intelligence
Nine Day Win Streaks for the S&P 500 Nine-day winning streaks have been a reliable bullish signal for the S&P 500. In every instance since 1990, the index has been higher 12 months later, delivering an average gain of 16.7%, a track record that keeps bulls smiling. Image: Carson Investment Research
Daily Percentage Change in the Philadelphia Semiconductor Index (SOX) The Philadelphia Semiconductor Index (SOX) fell 10.26% last Friday, its sharpest decline since March 2020. The long-term story remains intact, but expectations had clearly overheated. Image: Deutsche Bank
U.S. Equity Market Speculative Trading Indicator Animal spirits are building, but not yet overheating. Retail activity and Goldman Sachs’s Speculative Trading Indicator are firm, still short of past cycle peaks. Image: Goldman Sachs Global Investment Research
Short Interest as % of Market Capitalization S&P 500 Median Short interest in the median S&P 500 stock sits at 3.2%, a relatively elevated level, but the rise appears driven by hedging activity rather than bearish conviction, offering little evidence of a market inflection point. Image: Goldman Sachs Global Investment Research
Probability of U.S. Recession In the Next 1 Year The market is pricing in just an 11% chance of a US recession over the next year, while Goldman Sachs puts the odds closer to 25%, above the historical average. Is the market underpricing the risk? Image: Goldman Sachs Global Investment Research
S&P 500 Returns After >19% in Two Months Since the late-March lows, the S&P 500 has rallied more than 19%. In similar rebounds, stocks have typically pushed higher over one-, three-, six-, and twelve-month horizons, with average one-year gains above 41%! Image: Carson Investment Research
Crypto Fund Flows Crypto funds have endured persistent outflows over the past two months, with Bitcoin vehicles taking most of the selling pressure. Last week, however, inflows ticked higher, offering a small boost of optimism. Image: Deutsche Bank Asset Allocation
Relative Total Return Performance S&P 500 Momentum vs. Low Volatility Stocks The ratio of S&P 500 momentum to low volatility stocks is nearing Tech Bubble peaks, pointing to a tech-fueled late cycle. The trend can extend, but it also heightens the risk of a more abrupt downside if that leadership falters. Image: Goldman Sachs Global…
CPI Computers, Periph and Others vs. Import Price (Leading Indicator) AI may put upward pressure on near-term CPI, especially in computers, peripherals and related electronics, as surging demand lifts the cost of chips, memory and other key components. Image: Deutsche Bank
The Math of Drawdowns – Recovery Requied to Break Even After a Portfolio Decline Cut a portfolio in half and you need to double it to break even. That is not bad luck, it is simple compounding working against you. The bigger the loss, the tougher the climb back. Image: Real Investment Advice