Published
7 months agoon
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Good morning, Bull Sheeters. Global stocks are mixed. China-Trump trade tensions are depressing Asian markets, but vaccine hopes are lifting Europe and U.S. futures.
Let’s see where investors are putting their money.
***
Bank of America released its much followed fund manager survey yesterday. There’s so much in it that I’ll cover the findings tomorrow as well.
The big take-away: A V-shaped recovery is a longshot. America’s summer surge in coronavirus cases has just about wiped the best-case scenario off the table.
According to the survey, roughly one in seven respondents (only 14%) now say they expect the most benign sequence of events: the quick, sharp economic recovery. “U” continues to be the most likely prospect, but the dreaded “W” is gaining ground. (This is beginning to sound like the most frightening episode of Sesame Street ever scripted.)
All in all, investor sentiment remains extremely cautious. Fund managers are watching as investors crowd into the perceived safety of tech, gold, cash and bonds and ditch (or even, short) energy, banks and industrials. Earnings season is unlikely to change that.
And, the coming election is putting investors in a wait-and-see mood. No surprise there. This happens every four years.
The most popular Q3 trading strategy now is to do nothing.
There’s another number (two, actually) to watch. The S&P 500 at 3,250. Once the benchmark index ticks above that level, it’s time to sell, survey respondents say. The other number: 2,950. If the S&P hits that floor, then buy, they say.
At this rate, we could hit S&P 3,250 this week, if not today. Maybe somebody should alert the Robinhood crowd.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack
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