It is a market phase characterized by great uncertainty.
(Photo: dpa)
Dusseldorf The slump in investor sentiment after the price slide at the end of last week was notable. Sentiment expert Stephan Heibel, according to the Handelsblatt survey Dax-Sentiment, considers the turnaround to be so violent “that it is hard to believe in a quick turnaround”.
After such a bad stock market year as 2022, many investors were at least looking forward to a conciliatory end to the year, perhaps even to a small Christmas rally. But this hope is passé – investor sentiment has plummeted, they are unsettled.
According to Heibel, there may be a gradual improvement in sentiment or at least a habituation effect to the prospect of further increases in key interest rates. “But the chances of a noteworthy year-end rally are poor based on the current mood.”
A week ago, the headline of the contribution to the sentiment survey read: “Investor mood shows ‘explosive mix’ – sell-off on the Dax possible”. This sell-off occurred with a weekly minus of 3.3 percent and a price slide at the top of 860 points.
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The reason for this was the interest rate decision by the European Central Bank (ECB). Fed Chair Christine Lagarde admitted for the first time that inflation will not go away on its own.
Rarely before such a good gold atmosphere
Heibel had expected violent price movements on the oil market a week ago. Two reports made the rounds on the oil market: First, Bloomberg was able to prove that Russian oil was on its way to Asia on tankers after Europe introduced a price cap. On the other hand, Goldman Sachs has prepared a commodity outlook for 2023, which speaks of price increases of 43 percent on average. The price of crude oil then rose by ten percent.
The mood for gold has developed constructively for the sentiment expert. His assessment is based on survey data from his analysis house Animusx. A comparably optimistic mood with simultaneously moderate expectations has only occurred twelve times in the past 17 years.
On average, the gold price rose by seven percent in the following six months, and by as much as 14.5 percent in the following twelve months. “That would be enough to jump over the $2,000 mark per troy ounce (31.1 grams),” calculates Heibel.
Current survey data
Investor sentiment slipped from minus 0.9 points in the previous week to minus 5.0 points. The brighter mood from November has thus already changed back into a depressive mood. The year threatens to end as it began and as it has been throughout with the exception of November: with bad-tempered investors.
Uncertainty is back, too, more violent than ever. The value of minus 7.2 points shows the greatest uncertainty since June of this year. At least there is slight optimism about the future, with future expectations rising slightly to plus 0.6 points. In the previous week, this value was minus 0.6 points. Accordingly, some investors want to use the setback of the past week to buy, the willingness to invest has risen to 1.1 points.
That The Euwax sentiment of the Stuttgart Stock Exchange, where private investors trade, has risen to the zero line. This means that the proportion of call products used to speculate on rising prices is the same as that of put derivatives, which increase in value when prices fall, in private investors’ custody accounts. They have unwound the hedges with put leveraged products that investors had entered into in October and November in the course of the 2800-point rally.
Institutional investors who hedge themselves via the Frankfurt futures exchange Eurex remain cautious. The put/call ratio has risen to 2.1 percent, signaling strong demand for put protection.
Investors in the USA are slowly taking heart, the put/call ratio on the Chicago futures exchange CBOE has continued to decline. The investment ratio of US fund investors rose to 72 percent after 56 percent in the previous week. This is the highest investment rate since April.
However, US private investors remain pessimistic. The bull/bear difference is minus 21 percent: 45 percent of pessimists, called bears, face only 24 percent of optimistic bulls. The “fear and greed indicator” of the US markets, calculated using technical market data, shows moderate fear at 43 percent.
Do you want to take part in the survey? Then let yourself be informed automatically about the start of the sentiment survey and register for the Dax sentiment newsletter. The survey starts every Friday morning and ends on Sunday afternoon.
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