Sentiment is an important measure to gauge future expectations for market moves. The caveat, however, is sentiment is often correlated to what has happened in the market recently.
The charts below show the percentage of Consensus Inc.’s survey of newsletter writers who describe themselves as bullish. The grey region represents one standard deviation from the average.
Survey participants in stocks equaled their most bullish reading on stocks in six years (January 2018). Sentiment jumped in tandem with the year-end rally in equities.
Bullish sentiment on Treasury bonds is at its highest level since August 2020, the all-time peak in bond prices and right in the middle of the COVID-19 pandemic.
Sentiment had been bearish on bonds as late as September but made a strong move higher on the back of the Fed’s pivot heading into 2024.
