Experts are interpreting the currently wait-and-see attitude of investors as positive, at least in the short term.
(Photo: dpa)
Dusseldorf After a weak stock market year in 2022, investors are initially waiting. This can be derived from the data from the current Handelsblatt survey on Dax sentiment. Despite a Dax sideways movement in the past week, the mood has fallen. The willingness to invest is also rather moderate.
But sentiment expert Stephan Heibel, who evaluates the weekly survey, interprets the wait-and-see attitude of investors as positive, at least in the short term. “At the beginning of the year, some new investment ideas are likely to emerge that will encourage some investors to buy,” he explains. “Based on the sales made at the end of the year, even a small amount of interest in buying could cause prices to rise.”
The fact that the year-end rally failed to materialize on the last trading days of 2022 should not have surprised any attentive readers of sentiment evaluations. “Without very positive news, the chances that share prices will continue to climb are slim,” said Heibel in early December.
The stock exchange year 2022 ended for the Dax with a minus of 12.4 percent. But the minus says little about how turbulent the stock market year was overall. In the meantime, the Dax was almost 30 percent in the red.
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In order to identify the low points, the five-week sentiment average also offered valuable help in the stock market year 2022 (see chart). In three cases there was an extremely negative value on the bottom, after which prices recovered again.
However, there was only a sustainable trend reversal after the third extreme value at the end of September 2022. The first two extreme values in the Dax sentiment were only followed by a longer recovery phase, which amounted to up to 1500 points.
The Dax listings for the first two extreme values were almost identical. The leading index was at 12,438 points at the end of March and at 12,390 points in mid-July. Only at the third extreme value did the index slip almost 600 points down to 11,862 points.
The five-week average is therefore an accurate indicator of countermovements, which do not necessarily have to turn into a sustainable trend reversal.
Current survey data
The mood is still bad with a value of minus 1.7 points, but the short-term sentiment remains far from extreme pessimism, which starts at a value of minus four points.
But the sideways movement of the past week did not leave a neutral mood, despite a conciliatory end of the year there is moderate pessimism. After all, the low for the year was already three months ago.
And investors remain unsettled. After minus 5.8, this value has fallen a little to minus 3.5, but the survey participants are far from the complacency that is characterized by positive values.
With a value of still plus 0.8 points, future expectations indicate only moderate optimism. After the heavy sell-off in 2022, the stock market is no longer really trusted.
The willingness to invest is also more moderate than clear with a value of plus 2.0 points. Investors have evidently sat back a little between the holidays and are waiting to see what the new year will bring.
The Euwax sentiment of the Stuttgart Stock Exchange, where private investors trade, has continued to rise and is now at plus 4.5 percent. Since positive values indicate a higher proportion of call leverage products on the Dax, this value signals an increasing willingness to take risks.
Institutional investors who hedge themselves via the Frankfurt futures exchange Eurex also rely on rising prices at the turn of the year. The put-call ratio has fallen to 0.4 percent, signaling high interest in call options. The appetite for call options is also increasing in the USA, the put-call ratio of the Chicago derivatives exchange CBOE has fallen further and is currently trading at 0.9 percent.
US fund investors have slightly increased their investment ratio to 44 percent after last week’s low. But they still hold a lot of cash in order to get in at a later date. The bull-bear differential for US private investors, i.e. the number of optimists minus the number of pessimists, is at minus 21. The bear camp has shrunk slightly to 47.6 percent, while the bull camp has grown to 26.5 percent.
There are two assumptions behind surveys such as the Dax sentiment with more than 7,500 participants: if many investors are optimistic, they have already invested. Then only a few are left who could still buy and thus drive prices up. Conversely, if investors are pessimistic, the majority of them have not invested. Then only a few can sell and thus depress the courses.
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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