Stock Markets: Investor sentiment in the wake of the Corona crisis

The weekly sentimental-technical survey of the analysis houses suggests that investors are willing to sell

We could be curious to see what the Handelsblatt’s weekly survey of private investors would reveal: To the surprise of many, the US stock market and the German leading index had risen by 430 points last week. This was despite ever-increasing reports of the spread of viral infections in China. However, private investors have not become euphoric after these gains in the stock markets, but rather cautious. They would take profits at the first opportunity, according to the conclusion of Stephan Heibel, the head of the AnimusX survey.

Stock Markets: The results of the sentiment surveys

The analysis of the survey showed that private investors are highly invested and that institutional investors also expect stock markets to continue to rise. However, the confidence of those who want to buy stocks in the future has declined considerably. As a result, there is a lack of buying interest, which could lead to further price increases. The willingness to invest has dropped to 1.0 points. A clear change in sentiment compared to the previous week, which shows that the buying interest has declined considerably.

Very interesting is also an overarching view of the sentiment specialist Heibel, who had spoken with CEOs and CFOs at an investor conference last week. He said that they still had no idea how the coronavirus would affect future business. The usual, rampant uncertainty about the duration of the shutdowns and the speed of the catch-up measures.

As far as the sentiment on the Euwax derivatives market in Stuttgart is concerned, a shift into the neutral zone can already be observed there. But the professionals at Eurex in Frankfurt are different. They are still heavily involved in call options, and apparently expect further increases in equity market prices.

The competitor company Sentix also came to a similar evaluation of the sentiment as AnimusX. The buy signal of the previous week is off the table. One has to think about the potential of German stocks, while there is no sell signal for the US markets yet.

There, US investors continue to show great interest in call options on the Chicago Futures Exchange CBOE. The put/call ratio is still quoted at an absolutely low level.

The Fear&Greed index, however, which has cooled down noticeably after weeks of soaring prices (currently 57), is different. The investment ratio of US fund managers has also continued to fall sharply. In the past two weeks, it has fallen from 93 percent to 63 percent.

Bottom line

The weekly sentimental survey of the analysis houses suggests that investors are willing to sell. All it takes is a small event. The Dax is on its way to an all-time high – once again. Will there be profit taking once again? Sentiment expert Heibel on the short-term outlook: “It takes good news to keep the rally going.

Die Aktienmärkte an Allzeithochs - trotz Coronavirus

Photo: Deutsche Boerse AG

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