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Optimism From Professional Investors Reaches 32 year High

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(Via CNBC)

Cramer’s 5 cardinal rules of engagement with the bull market Cramer’s 5 cardinal rules of engagement with the bull market
23 Hours Ago | 11:09
Stock market optimism among professional investors just keeps on surging, and is now at the highest levels since before the crash of 1987.

Bullishness, or the belief that the market is heading higher, is now at 66.7 percent in the latest Investors Intelligence survey, a widely followed gauge of sentiment among investment newsletter authors.

That’s the highest level since early April 1986 — a potential warning sign that the rush into equities is getting overdone. After all, a year after the bulls had reached this level came the infamous Black Monday crash that sent the Dow Jones industrials down nearly 22 percent in a single day.

“Sentiment readings have roughly followed their 1986/87 pattern. Then the bulls peaked with initial market highs early that year and they returned to above 60% levels months later after more index records,” John Gray, editor of the Investors Intelligence weekly report, said in the latest issue Wednesday.

“In 1987 stocks crashed a few months after that. A repeat of that scenario suggests potential danger, especially as the market moves become parabolic,” he added. “Those recently holding cash appear to be chasing a rallying market, adding fuel to the fire.”

Indeed, the II survey reflects other gauges that show stock market fever is reaching levels not seen in years.

The January Bank of America Merrill Lynch Fund Managers Survey — another gauge of professional investors’ sentiment — showed cash levels at a five-year low, allocations to stocks at a two-year high and the overweight ratio of stocks to government bonds at its highest since August 2014.

Sentiment surveys can be contrarian indicators when at extremes, which is why the current rush into stocks has triggered some concern. In just over two weeks of trading, investors already have poured $14.8 billion into stock-based exchange-traded funds, another indicator of money surging in.

The Investors Intelligence survey also showed that skepticism is nearly gone as the S&P 500 has posted a 3.85 percent gain in 2018.

Bearishness fell over the past week to 12.7 percent, also the lowest reading since April 1986. The level was at 15.2 percent just two weeks ago and was above 20 percent the week of Sept. 12.

“The strengthening economy and increasing earnings projections makes this outlook hard to defend.” Gray wrote. “Low bearish readings are negative for contrarians as the markets are said to ‘climb a wall of worry.'”

The newsletter each week features a sample of bullish and bearish quotes from the authors it polls. This week found very little in the camp of those looking for a downturn, save for William John Kuhn, whose “The Risk Factor Method of Investing” compared the market to a runaway train.

“The lessons of the last crash are being ignored. We are witnessing all the safety equipment being ripped out of the stock market by those in power,” Kuhn wrote. “We are witnessing the market climb a mountain made of Swiss cheese with no guardrails.”

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Politics

Soros Newest Investor Of Tesla Bonds

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Tesla looks to have a new bond holder and it’s none other than George Soros. Whatever this mean, Soros has also taken a stake in Crypto-Currencies .

Zerohedge Reports: Amid Elon Musk’s darkest hour in late March – as his stocks and bonds tumbled in price – it seems there was at least one other billionaire willing to buy the ‘blood on the street’.

According to the latest 13Fs, George Soros’ investment firm took a $35 million stake in Tesla’s convertible bonds during the first three months of the year.

As a reminder, convertibles are hybrid securities, either bonds or preferred stock, that can be exchanged for a predetermined number of common shares. That effectively lets an investor participate in stock-price changes, but with the yield and greater security of a fixed-income instrument.

The March 2019 Converts bounced handsomely off those lows – tracking the stock’s divergent bounce – but in recent days has fallen back towards the lows, catching down to the straight bonds record low price.

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Culture

“Racial Bias Education Day” To Close Down Starbucks Nationwide

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Starbucks is going to the illogical extreme by taking an entire day to put their employees through what they call “Racial Bias Education Day”. Coming after a viral videos showed two men being arrested in a Starbucks in Philadelphia. Starbucks almost instantly gave into calls to do ‘something’ but will this really fix anything in a culture where ‘racism’ is more of a political talking point than an actual substantive conversation or debate.

CNBC Reports: Starbucks said Tuesday it will be closing all of its company-owned restaurants in the U.S. during the afternoon of May 29 to conduct a racial-bias education program.

“I’ve spent the last few days in Philadelphia with my leadership team listening to the community, learning what we did wrong and the steps we need to take to fix it,” Kevin Johnson, CEO of Starbucks, said in a statement Tuesday. “While this is not limited to Starbucks, we’re committed to being a part of the solution. Closing our stores for racial bias training is just one step in a journey that requires dedication from every level of our company and partnerships in our local communities.”

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Business

Soros Now Investing In Crypto-Currencies

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(Via Zerohedge)
By TD


After a historic drop in cryptocurrency prices in the first quarter, one which deflated much of the euphoria that surrounded the sector in late 2017 and the start of this year, the space is about to get exciting again because none other than 87-year-old billionaire George Soros is reportedly preparing to trade cryptocurrencies as prices plunge.

According to Bloomberg, Adam Fisher -who oversees macro investing at New York-based Soros Fund Management – has received internal approval to trade virtual coins in the last few months, “though he has yet to make a wager.”

The question, of course, is whether Bloomberg’s leak is accurate, and if indeed Soros is only now getting started in the space or if he has quietly loaded up already.

What is ironic, is that just three months ago when speaking at the World Economic Forum in Davos, Soros said digital coins cannot function as actual currencies because of their volatility, “but he didn’t predict the hard tumble that some observers had forecast at the time.”

“As long as you have dictatorships on the rise you will have a different ending, because the rulers in those countries will turn to Bitcoin to build a nest egg abroad,” Soros, 87, said on Jan. 25.

With Bitcoin tumbling below $7000 recently…

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