FNArena’s Weekly Insights – April 19 2022
In this week’s Weekly Insights:
-Market Sentiment And Warning Signals
-What’s With Liquidity?
-Conviction Calls
-FNArena Talks
-Rudi Presents
By Rudi Filapek-Vandyck, Editor FNArena
Market Sentiment And Warning Signals
Are we witnessing a glaring disconnect between unbridled share market optimism and deteriorating market fundamentals?
Yes, say market strategists at Bank of America whose April survey of global funds managers revealed overall anxiety about deteriorating growth, potentially resulting in 1970s style of stagflation, has not been this high since August 2008, when the GFC bear market was about to take yet another major tumble downwards.
Actually, the April survey showed optimism regarding global growth has by now sunk to an all-time low with survey data going back all the way to 1994.
Traditionally, when sentiment sinks this low it is treated as a Buy-signal by the strategists, but not this time. This time, suggest BofA strategists, investors should treat the disconnect in equities as an opportunity to lighten up and take risk off the table.
In institutional lingo this becomes “Sell the rallies” with the strategists describing the opening weeks of the calendar year as merely the “appetizer not main course of 2022”.
