09/06/21 15:15:00

Market sentiment: "The air ran out"

For the fifth time in a row, the DAX posted a gain in our sentiment survey compared to the previous week. With different consequences for institutional and private investors.

Despite two new all-time highs since our last sentiment survey, the DAX seems to be running out of steam. The low upward momentum has enticed some former pessimists, at least among institutional investors, to take new positions. This is probably not a fundamental pessimism, but according to Joachim Goldberg rather the attempt to generate some extra return with possible DAX setbacks. Private investors are not exposed to this pressure to succeed. According to the behavioral economist, this explains the rather high proportion of neutral-minded players in this panel. At the same time, the sentiment gap with institutional counterparts has widened further. Overall, these are not bad omens for the DAX.

9 June 2021. FRANKFURT (Börse Frankfurt). A trading range of about 1.6 percent resulted since our last sentiment survey for the DAX, after all associated with two new all-time highs! This is how one could summarize the trading days since last Wednesday. But one thing is also obvious: It has become noticeably quieter around the DAX, as if the players no longer really know what to do and as if the upward momentum has run out of steam. But there also seems to be a lack of imagination for stronger downward countermovements. In fact, it is not only the stock market players on the other side of the Atlantic who are in a kind of hanging game. Where - in absolute terms - a not so bad U.S. labor market report from last Friday behind, and probably the most important event this week, the publication of the development of the U.S. consumer price index tomorrow Thursday (for the month of May), lies ahead. Even if one hopes in many places from these data an indication of how it could go on in terms of inflation - at least the members of the Federal Open Market Committee of the U.S. Federal Reserve are not allowed to comment on this anyway due to the silence period before the meeting on June 15/16. 

Pessimists are back

And so it comes as no surprise that the sentiment of the institutional investors with a medium-term trading horizon surveyed by us has hardly changed. Our Börse Frankfurt Sentiment Index fell again by 4 points to a level of -14. This means that the sentiment barometer is at exactly the same level as two weeks ago, and the distribution between bulls and bears is also identical. In other words, on balance, the pessimists who had retreated the previous week have returned. Probably at a much higher level than the week-on-week change in the DAX of just +0.4 percent might convey. In the same course, the bull camp has also increased slightly.

With the private investors the opposite trend from the previous week has further strengthened. This is because the Börse Frankfurt Sentiment Index of this panel has now risen for the fourth time in a row - this time by 4 points to a new level of +10. This increase is not due to a larger number of optimists. On the contrary, the rise in the index is largely due to pessimists who have reconsidered their stance and joined the ranks of the neutral players. In fact, with a share of 32 percent of all private investors, this group is at an annual high!

Strong Sentiment Gap

On balance, today's survey reveals an even wider gap in sentiment between institutional and retail investors. What's more, while the group of neutral players among retail investors is at its highest level of the year, the same group among institutional investors, by contrast, is at its lowest level of the year.

However, it would be premature to infer from this a fundamentally opposing market assessment between these two panels. The fact that almost a third of private investors have moved to the sidelines may be due to the fact that for them - unlike some active institutional investors - there is no compulsion to beat the market and outperform the DAX. Ultimately, at least the new pessimists hope to improve their own track record somewhat with the help of DAX setbacks. If the calculation works out, the demand of these players due to covers should be a support for the DAX in the range between 15,250 and 15,300 points. On balance, the situation of the DAX has improved slightly compared to the previous week. 

9 June 2021, © Goldberg & Goldberg für boerse-frankfurt.de

Sentiment Index of Institutional Investors


compared to last survey



DAX (change from previous survey): 15,640 (+60 pts.)
Frankfurt Stock Exchange Sentiment Index Institutional Investors: -14 points (previous survey: -10 points)

Sentiment index of private investors


compared to last survey



DAX (change from previous survey): 15,640 (+60 pts.)
Frankfurt Stock Exchange Sentiment Index Private Investors: +10 points (previous survey: +6 points)

About the Börse Frankfurt Sentiment-Index

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.