If you blinked you missed it Friday as most mainstream media simply brushed it off, but Americans’ consumer sentiment suddenly crashed to 10 year lows…
As the casedemic and fearmongering of the government grew about the Delta variant (or Lambda) and the great unwashed unvaxx’d masses refuse to bend the knee…
…all the ‘smartest men (or women or other) in the room’ quickly pointed over here at the record highs in stock markets…
All of which is no surprise since, as Bloomberg’s Jan-Patrick Barnert and Michael Msika report, it’s been two decades since Wall Street analysts were this upbeat.
About 56% of all recommendations on S&P 500 firms are listed as buys, the most since 2002. It’s one more data point that shows the extent of the euphoria sweeping markets after a blockbuster earnings season.
It’s not just the US: in Europe, about 52% of recommendations on Stoxx 600 firms are buy or equivalent, a 10-year high. In Asia, that number jumps to 75%, the highest proportion since at least 2010.
For all the fearmongering about the delta variant, China’s regulatory crackdown, waning Federal Reserve stimulus, and now geopolitical chaos in Afghanistan (again), stock prices have shrugged it all off with their eyes on Jay Powell.
“It’s not just financial conditions and low rates fueling the appetite for risk assets – tremendous fundamental improvement is forecast into 2022,” Todd Jablonski, chief investment officer at Principal Global Asset Allocation, said in a note.
And as the chasm between Wall Street optimism and Main Street desperation grows, it is painfully clear exactly what (or we should say who) is driving the wedge…
Given the ‘reportedly’ most progressive Fed Chair ever, who seeks out homeless peoples’ perspectives and worries about the racial inequity in unemployment rates, perhaps an honest look in the mirror is needed as to the real ‘systemic racism’.
Not everyone is a “believer”:
“I’m a believer that the market moves in whatever direction hurts the most participants,” said Dave Lutz, head of ETFs at JonesTrading Annapolis.
“If all the analysts on the Street are bullish, I’d be very cautious,” he said in a note.
Could never happen again right?