Loading ...“The dead are born in Cheery Land: their buttocks, Nay!”–Gregory Corso
None of these indicators mean much in isolation, and they don’t all tell the same tale. It is messy! But were investors growing wildly optimistic, many of these gauges would likely be zooming or reaching extreme levels.
News headlines also offer insight into sentiment’s state. Especially dour coverage reflects and amplifies negative feelings, and vice versa. Presently, we seem to be somewhere in the middle. We see some pundits noting 2019’s great returns while urging caution—or (erroneously, in our view) claiming a partial US/China trade deal and Fed rate cuts temporarily propped up markets. However, we see few warning the bull market or expansion is in immediate danger. Most seemingly anticipate positive returns—lackluster, but positive.
On the whole, euphoria appears distant today, hinting at continued bull market in 2020. But sentiment’s improvement also suggests the gap between reality and expectations is smaller than last year. This means the bar for reality to clear is likely somewhat higher now, raising the probability of lower returns in 2020. We still anticipate a fine year for stocks, but perhaps not a steep climb like we saw in the last 12 months.
https://www.fisherinvestments.com/en-us/marketminder/a-new-year-sentiment-checkin