It is a market phase characterized by great uncertainty.
(Photo: dpa)
Dusseldorf The stock year 2022 marks the end of a multi-year rally in the leading German index Dax. Private investors are accordingly worried, but they are now positioning themselves for rising prices. This is shown by the weekly Handelsblatt survey Dax sentiment and the evaluation of other indicators.
Speculations on rising prices can be seen in the Euwax sentiment of the Stuttgart Stock Exchange, where private investors trade. Sentiment is back in positive territory for the first time since August. There are currently more call products in the portfolios, which are used to speculate on rising prices, than put derivatives, which increase in value when prices fall.
If the value of the index is positive, the majority is betting on a rising market. A negative value, on the other hand, means that investors are more likely to assume that prices will fall. The value is currently 4.5 after falling to as low as minus 15 in November.
“Hedges put in after the October rally in November have been unwound. Private investors are gradually positioning themselves for rising prices,” observes sentiment expert Stephan Heibel, who evaluates the data for the Handelsblatt.
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Institutional investors on the European derivatives exchange Eurex are also becoming bolder. Here, the put-call ratio of 0.9 shows that the pros are speculating on rising prices with call options. The situation is similar in the USA: The put-call ratio on the Chicago derivatives exchange CBOE also shows increasing interest in call options.
At most short-term speculation on rising prices
That looks like a strong trend – but in combination with the survey data from the Handelsblatt newspaper, Heibel comes to a different conclusion: “Obviously, this is at most short-term speculation. Because there is no sign of a conviction that prices will rise in the future, either in the USA or in Germany. Accordingly, one or the other might want to gamble a little, but long-term positions are currently hardly being built up.”
Because the basic mood on the market is still sceptical. Although investor sentiment has risen slightly, it remains negative at minus 2.9 (last week minus 5.0). So survey participants remain concerned. Hardly anyone is currently expecting prices to rise, almost every second participant currently sees the Dax in a sideways movement.
Long-term expectations are only slightly better: future expectations are moderate at plus 0.5 (previous week plus 0.6). Less than one in three expects prices to rise in three months. The largest group expects a sustained sideways movement.
Uncertainty is also still high at minus 5.8 after minus 7.2 in the previous week. After all, the expectations of more than every second person in the previous week were hardly or not at all met.
The willingness to invest can be classified as comparatively normal at an unchanged 1.2. Only one in five wants to buy shares this week or next.
“The 2022 stock market year was one of the worst in recent years. The shock of the losses in the current year is still in the limbs of investors. So far, there has hardly been any anticipation for the new year 2023,” summarizes Heibel. “So I would currently describe the sentiment data among investors as skeptical and wait and see. There are not necessarily more reasons for rising prices in the coming year than there are reasons for falling prices.”
However, the managing director of the analysis company AnimusX points out a special feature: the mood between private and professional investors has been developing differently for several weeks. This results from the different survey results for the Handelsblatt (mainly private investors) and AnimusX (institutional investors).
“Professionals have become increasingly optimistic in recent weeks,” notes Heibel. “If we assume that private investors in particular have often not received any in-depth training for investing, they may lack the callousness to interpret the flood of negative reports as a signal for a bottom, as the professionals obviously do.”
It is also striking that in the USA fund managers have reduced their investment quota from 71 to 39 percent. However, Heibel sees no preparation for an upcoming sell-off: “I suspect less market timing behind this decision than the need to generate cash in order to be able to pay out cash outflows at the end of the quarter.”
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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