Professional pessimists in particular cashed out right at the start of the year, while private investors have become somewhat more cautious. Still a supportive scenario for Goldberg, albeit slightly weaker.
The DAX has given up quite a bit in the course, of which 200 points are still left. Professional investors in particular have used this to cash in. 10 percent are out of the short commitments, 7 percent of them to the long side. As a result, the sentiment index of this investor group rose to +7 points. The situation is somewhat different for private investors, 4 percent of whom have sold shares. Their sentiment index is now closer to that of the professionals again, at +10 points.
According to Joachim Goldberg, investors are not expecting a fundamental deterioration in the business environment. Nevertheless, the optimism is not yet worryingly high. On the upside, the behavioral economist expects braking profit-taking at 16,400/16,450 points. On the downside, however, he is not sure whether the potential demand at 15,550/15,600 points could be enough to support the DAX.
12 January 2022. FRANKFURT (Börse Frankfurt). All institutional investors who were pessimistic in our last Sentiment survey must indeed be credited with a good nose for developments on the stock markets. It was probably not even the negative Omikron headlines that caused the DAX - starting from its near-all-time high last Wednesday - to temporarily lose around 3.4 percent of its value. Rather, it is attributed to the minutes of the December Federal Open Market Committee meeting published on the evening of the same day that the stock markets on both sides of the Atlantic had to accept significant setbacks. A document that apparently gave many players the impression that the Fed could already start this year not only with a series of interest rate hikes, but also - surprisingly for some - with a meltdown of its high bond holdings. Nevertheless, by the time of today's survey, the DAX had recovered some of its losses, so that a weekly minus of 1.2 percent currently remains.
However, the pessimism among the institutional investors we surveyed has not become entrenched. Our Börse Frankfurt Sentiment Index rose by 17 points compared with the previous week to a new level of +7. This is not least due to the fact that, as expected, almost a quarter of the players with a pessimistic attitude last week only speculated on a DAX setback in the short term and have now realized the accumulated profits. In the process, 70 percent of the former bears have turned directly to the bull side and thus turned their commitment by 180°. For some investors, therefore, a good start to the year.
Among private investors, however, we saw a development in the other direction, as the Börse Frankfurt Sentiment Index of this panel declined by 5 points to a new level of +10. The group of optimists decreased by 4 percentage points, whereby, interestingly, only a small share turned directly to the bear side - in the best case, the majority of those who left were content with profit-taking.
Sentiment gap almost closed again
With today's survey, the gap between institutional and private investors that emerged at the beginning of the year has been closed again, except for a few points. And so the majority of investors we surveyed do not seem to assume that the general conditions for the stock markets will change in the long term, at least in the coming weeks, due to a possibly tighter monetary policy by the U.S. Federal Reserve.
However, the optimism of the investors we surveyed is not so high that there is any need to worry about the local DAX from a sentiment perspective alone. On the upside, any profit-taking (possibly in the area of 16,400/16,450 DAX points) is likely to pose a temporary obstacle for the DAX.
However, the situation is more difficult on the downside, as it is difficult to assess whether further domestic demand from our investors in the event of a renewed setback (possibly at 15,550/15,600) would be sufficient to sustainably support the stock market barometer. This applies in particular if there should be capital outflows by long-term (international) investors. From this perspective, the overall situation for the DAX has deteriorated somewhat compared with the previous week.
12 January 2022, © Goldberg & Goldberg for boerse-frankfurt.de
compared to last survey
DAX (change from previous survey): 15.980 (-200 pts.)
Börse Frankfurt Sentiment Index Institutional Investors: -+7 points (previous survey: -10 points)