Sentiment Snoozer

Dec 15, 2022

The data collection period for the survey mostly missed the FOMC’s rate decision and subsequent market reaction, meaning the latest readings are to some degree out of date.  Regardless, the latest reading on bullish sentiment from the AAII was little changed once again at 24.3%.  That was down modestly from 24.7% last week and 24.5% the week prior.

In the chart below, we show the three-week range that bullish sentiment has moved between. With only 0.4 percentage points between the high and low, the current three-week range has been the smallest on record in data going back to the start of the survey in 1987. Basically, bullish sentiment has been a complete snoozer.

While bullish sentiment has hardly moved, there have been larger shifts in the percentage of respondents reporting as bearish.  Bearish sentiment has risen for three weeks straight to reach 44.6%.  That is the highest level since November 10th but still handily below the multiple readings above 50% from earlier this year.

Given bearish sentiment climbed by much more than bullish sentiment, the bull-bear spread fell deeper into negative territory. In fact, the record streak of 37 weeks with bears outnumbering bulls presses on.

With bulls little changed, the rise in bears came from those formerly reporting as neutral. Neutral sentiment dropped to 31.1% from 33.5% last week. While that remains an elevated reading relative to most of the past year, it is only slightly below the historical average of 31.4%. Click here to learn more about Bespoke’s premium stock market research service.

Another Fed Day Ends in the Red

Dec 14, 2022

Another Fed day is in the books, and the Fed Funds target rate is now 50 bps higher than it was yesterday. In tonight’s Closer, we will provide further commentary on the content of the FOMC’s statement, SEP, Fed Chair Powell’s presser, and the market reaction. With the S&P 500 finishing the day down 0.61%, today marked the third decline on a Fed day in a row. That is the longest streak of consecutive declines on Fed days since the three meetings ending July of last year.  Looking at the price action of the S&P over the past three meetings, today basically stuck to the script.  Whereas the index traded higher throughout most of the session leading up to the release of the policy decision, it plummeted when the statement hit the tape. That drop brought the index into the red on the day in a similar way to the September meeting.  Declines kept on coming until shortly after Powell took the podium. From there, the S&P 500 rebounded, even pivoting back into the green briefly around the time of the conclusion of the presser.  While it did not go on to end the day at the lows of the day like the past couple of meetings, Powell’s presser that pumped stocks back into the green was not long-lasting as the S&P dipped back into the red in the final hour of trading.  Click here to learn more about Bespoke’s premium stock market research service.