Market Sentiment: Nobody Believes a Meaningful Decline is Likely

Every analyst and strategist you could find yesterday was telling you to buy the dip, and after yet another 2% decline, today this group of people is still bullish. Nobody believes that a serious or meaningful decline might happen, and they all hope/wish/know that the Central Banks will come to the rescue — yet another über-bullish behaviour, specially since we know how well central banks managed to stop the decline in 2008. Lessons from history or experience are not learnt, and this will end for sure in tears.
March 17 (Bloomberg) -- David Joy, chief market strategist at Ameriprise Financial Inc.'s Columbia Management, talks about the U.S. and Japanese equity markets and investment strategy.
You can watch the interview from the link above. Here's the relevant quote from the interview: "This is a time to buy. I think the market has more than discounted the monetary impact of the earthquake. There's a good opportunity for a bounce [...] On the stocks, there's probably a little bit of a buying opportunity."
March 17 (Bloomberg) -- [...]

Equities will be supported,” Robert Marquardt, chairman and co-head of investment management at Signet Group, which manages or advises approximately $1.7 billion for institutional and private clients, said in a Bloomberg Television interview. “Following this crisis, central banks will probably go back on hold. This means liquidity stays on the table a little bit longer.”
The month long slide in stocks has left both developed and emerging market equities “mildly oversold,” according to Citigroup Inc. global strategist Robert Buckland.

No comments: