International investors drive share prices, local investors react with profit-taking. Goldberg warns that the market could run away from them.
Few positive signals, interest rate hikes could rise less dramatically - from the point of view of shareholders - has pushed the market up. According to Joachim Goldberg, mainly loss limits of the bears. Of the professionals here with a medium-term investment horizon, however, mainly bulls have reacted with sales of shares, 10 percent. Profit-taking, the behavioral economist suspects. Many have gone straight to the short side. The sentiment index falls to -23 points. Retail investors have also realized some gains, with the Sentiment Index for this group falling slightly to +15 points.
Goldberg suspects that long-term capital inflows move German blue chips. Domestic institutional investors are likely to be buyers again from 13,750/13,800 points, or else have to chase a further rising stock market.
16 November 2022. FRANKFURT (Börse Frankfurt). It actually only took one economic data item, after the publication of which the world of stock market players changed completely in this country as well. We are talking about U.S. consumer prices, which were published last Thursday and whose index in October had fallen short of the expectations of many economists. At the same time, this put a massive damper on the fear of inflation remaining high, which had been perceived as the biggest extreme risk until then - this was the result of the Bank of America fund manager survey for the month of November published yesterday. The resulting hope of many players that the peak of the inflation trend in the U.S. could possibly be behind us really took wing. Not only did equities boom, but other markets (U.S. government bonds and the euro against the U.S. dollar) also reacted sharply, sometimes violently. In the end, the DAX also posted a weekly gain for the fifth time in a row since our last sentiment survey, this time of around 5 percent.
... but not with us
Even if the strong development on the stock markets on both sides of the Atlantic at the end of last week was characterized by stop-loss buying and could thus have been an indication of a capitulation of the bears, this does not seem to apply to the institutional investors with a medium-term trading horizon that we surveyed. This is because our Börse Frankfurt Sentiment Index fell for the third week in a row compared with the previous week, despite significantly higher prices, this time particularly sharply by 17 points to a new level of -23. In the process, the group of bulls fell by 10 percentage points to their lowest level since August 17. A majority of more than two-thirds of these former optimists have turned directly to the bear side, i.e. turned their position by 180°, while the remainder have joined the ranks of neutral investors and thus settled for profit-taking.
Private investors also reacted in the same direction, albeit only to a very small extent. Indeed, the Börse Frankfurt Sentiment Index in this panel fell by only 2 points to a new level of +15, mostly due to slight profit-taking by former optimists.
Significant loss aversion
With today's survey, the sentiment gap between private and institutional investors has again widened significantly compared to the previous week. The fact that institutional investors are much more pessimistic than their private counterparts may be due to the fact that they had already heard the news of a missile strike in Poland before casting their votes and were therefore probably already hedging their positions on the stock market last night. However, there is much to suggest that the prepositioning - the majority of institutional investors were already pessimistic in the previous week - was not closed on balance in many cases, but even increased in some places. Perhaps it was simply the aversion of some bears to realize accumulated losses.
Be that as it may, it remains to be noted that the DAX, in spite of these pessimistic underlying losses, had hardly lost any ground compared to yesterday's high of around 14,440 points by the time of the survey. Not least because there is much (including the above-mentioned Bank of America survey) to suggest that the stock market barometer has benefited from long-term capital inflows. In any case, the majority of bearish domestic institutional investors are likely to act as buyers again after a veritable setback of the DAX (approx. 13,750/13,800 points). Or, in the worst case, they will have to chase a further rising stock market.
16 November 2022, © Goldberg & Goldberg for boerse-frankfurt.de
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Bullish | Bearish | Neutral | |
Total | 26% | 49% | 25% |
compared to last survey | -10% | +7% | +3% |
DAX (Change from previous survey): 14.300 (+680 points)
Börse Frankfurt Sentiment-Index institutional investors: -23 points (last survey: -6 points)
Bullish | Bearish | Neutral | |
Total | 45% | 30% | 25% |
compared to last survey | -3% | -1% | +4% |
DAX (Change from previous survey): 14.300 (+680 points)
Börse Frankfurt Sentiment-Index private investors: +15 points (last survey: +17 points)
The Börse Frankfurt Sentiment Index ranges between -100 (total pessimism) and +100 (total optimism), the transition from positive to negative values marks the neutral line.
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