Market Sentiment 05 (Nov 17 - Dec 25)

[behappyalways]

Infamous duct-taped banana eaten by crypto entrepreneur
https://m.youtube.com/watch?v=PwBv7V5rUnQ

[behappyalways]

Record levels of retail euphoria spotted as 56.4% of US consumers expect stocks to be higher in 2025
https://x.com/Mayhem4Markets/status/1862921205067419770

[winston]

The mother of all bubbles

The US has never been so overhyped, relative to the rest of the world

by Ruchir Sharma

THE idea of America as an exceptional nation, superior to its rivals and therefore destined to lead the world, seems passe to most observers.

In political, diplomatic and military circles, the talk is of a dysfunctional superpower, isolationist abroad and polarised at home. But in the investing world, the term “American exceptionalism” is hotter than ever.

United by faith in the strength of US financial markets and their capacity to keep outperforming all other economies, global investors are committing more capital to a single country than ever before in modern history.

The US stock market now floats above the rest. Relative prices are the highest since data began over a century ago and relative valuations are at a peak since data began half a century ago.

The US accounts for 70% of the global stock index, up from 30% in the 1980s.

America’s share of global stock markets is far greater than its 27 per cent share of the global economy.

Source: Business Times

https://www.businesstimes.com.sg/opinio ... ll-bubbles

[behappyalways]

Extreme Speculation Has Returned
https://www.zerohedge.com/markets/extre ... s-returned

[winston]

TINA?

US assets may have peaked, warn banks

Major investment banks are warning that the greenback, US stocks and crypto may have peaked.

Morgan Stanley has shifted to a bearish outlook on the US dollar, despite its gains following Donald Trump's victory in the presidential election.

The US stock market accounts for half of the global stock market capitalization, as global funds accelerate their flow into US stocks.

A powerful rally in US stocks as well as cryptocurrencies, has left the asset classes looking frothy, according to Bank of America's Michael Hartnett.

The S&P 500's price-to-book ratio has surged to 5.3 times in 2024, approaching the record peak of 5.5 in March 2000 during the height of the technology bubble.

BofA's Hartnett said there's a high risk of "overshoot" in early 2025 if the S&P 500 nears 6,666 points - about 10 percent above current levels.

The S&P 500 has surged about 27 percent in 2024 and is tracking its best year since 2019 on optimism around artificial intelligence and wagers that president-elect Donald Trump's "America First" policies will boost domestic markets.

His support for crypto also helped Bitcoin briefly rally past US$100,000 this week.

Hartnett said that with a market capitalization of over US$2 trillion, bitcoin was comparable to the 11th largest economy in the world.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... warn-banks

[behappyalways]

Americans are holding a record share of their assets in equities
https://x.com/Mayhem4Markets/status/1867630906887766298

[behappyalways]

People are feeling really bullish! Risk-on sentiment has hit the highest level since 2018
https://x.com/Mayhem4Markets/status/1868301789348470903

[winston]

Here are a few such stocks along with their price-to-earnings (PE) ratio:
CyberArk (CYBR): 1,139
Gilead Sciences (GILD): 1,008
CrowdStrike: 689
Palantir: 376
Datadog: 278
Cava: 253
Broadcom: 192

Source: Investor Place

[behappyalways]

Wow. Through the third quarter of 2024, U.S. households held a record 36% of financial assets in stocks
https://x.com/KevRGordon/status/1876379442320376247

[winston]

Others are certainly fearful right now

According to the weekly American Association of Individual Investors (AAII) survey, ~60% of individual investors are feeling bearish on the market right now.

Let’s put that number in context…

The AAII has been conducting this survey since the late 1980s. In that time, the percentage of bearish investors in the survey has surpassed 60% only six times before.

We saw surges like this twice in late 1990, twice during the 2008 financial crisis, and twice during 2022’s red-hot inflation plight.

In other words, investor sentiment is historically negative right now.

Who can blame them?

We’re in the midst of the biggest global trade war in nearly a century. Layoff announcements last month spiked to their highest level since July 2020, surging 245% to 172,017.

Consumer sentiment is crashing, -9.8% from January, according to the University of Michigan’s survey. Federal spending cuts are rattling the job market. One estimate for U.S. GDP growth has plunged from +2.3% last quarter to -2.8% this quarter.

Things look bleak right now. No wonder investors feel so bearish.

But history suggests that when investors are feeling this bearish, it is always a good time to be buying stocks…

Source: Investor Place