As seen yesterday there was only a modest change in the sentiment for ‘professional’ investors (though did not include Monday’s selloff) but in today’s AAII there was a more noted one and that was further bearish. Bears rose 6.7 pts to 48.5 and that matches the highest since the end of June. Bulls fell by 7.1 pts to 23.7, the least since August 6th. We’ve seen for months quite a discrepancy in the dour mood of the individual which I believe is mostly voting the economic environment while the ‘professional’ is just chasing tech stock momentum and as we’ve seen has been ebullient.
BEARS in orange, BULLS in white
The ECB meets today and it is most likely that they do nothing new as the region’s economy improves with the reopenings. We’ll see what Christine Lagarde says about the level of the euro where we’ve seen some rumblings of disappointment on the part of some members with its strength. With rates deeply negative (partially mitigated with tiering) and a huge balance sheet with no asset safe from their buying, what more can the ECB possibly do that would end up with a different result? Nothing. They are completely impotent and good luck to them when it comes time to raise rates again and to stop increasing the size of their balance sheet, let alone shrink it. The euro is higher ahead of the press conference while bonds are mixed.
The Euro STOXX bank index over the 6 yrs of NIRP and QE, down about 60%.
Japan’s July core machinery orders rose 6.3% m/o/m, well above the estimate of up 2% but follows a 7.6% decline in June. This is a very volatile number but a good tell on capital spending. Orders are down 16.2% y/o/y.
France said its industrial production figure in July rose 3.8% m/o/m but that was below the forecast of up 5%. The manufacturing component though did beat forecasts. Italy also reported its IP number and it beat the estimate. So we had the shutdown, now the reopenings and it’s now time to see how things are settling out in terms of seeing where we are along the path of recovery on the road to expansion.