Buy in May and stay?!

Written by Julien Mueller | 24 May 2016
Posted in Special research

The latest sentix Global Investor Survey reveals an exceptionally positive signal for the German equity market. The prospects for a new bull market are increasing as especially the medium-term market expectation of institutional investors is on the rise.

The sentix Strategic Bias rises to a new 13 weeks high as it expresses regained medium-term conviction of German equities. Especially institutional investors’ confidence gets a boost. The sub-index rises 13 points in comparison to previous weeks’ survey. It is in principle a bullish market indication. However, it contradicts the conventional market wisdom “sell in May”.

“Sell in May” describes the tendency of some investors to avoid period from May to October. In contrast, the increase of the sentix Strategic Bias points out that investors mentally prepare to buy instead to sell (refer to Background for a detailed explanation). Rising confidence, especially among institutional investors, is “apparently” neither caused by price indication nor by the news. Therefore, the latest signal should be taken seriously as emotions obviously were not the cause. Based on our statistical analysis, investors can theoretically expect an increase of around 2.3% over the next 16 weeks, on average, each time investors’ confidence has reached a comparable level.

Background

The sentix Strategic Bias (investors' six-month market confidence) is conducted on a weekly basis since 2001 as part of the sentix Global Investor Survey. It reflects the strategic view of market participants as well as their fundamental convictions and perceptions of value for a given market. As this indicator represents investors' general willingness to buy or sell it should not be interpreted as a contrarian signal. Rather it is usually leading the market by several weeks.
In the latest sentix Global Investor Survey was conducted from 19-May-2016 to 21-May-2016. 1032 individual and institutional investors took part in it.

sentix ASR Essentials 20-2016

Written by Manfred Hübner | 22 May 2016
Posted in sentix Weekly

Strengthening strategic bias for equities over bonds

The latest sentix survey suggest investors continue to warm to developed equity markets from a medium-term perspective, but are becoming markedly cooler on bonds (see p3-4). This has seen the gap between strategic bias readings for the EuroSTOXX and Bunds pull further away from its January lows (see Chart 2, p2), implying survey participants favour equities over bonds in the medium-term. However, sentiment towards emerging equity markets as an asset class has weakened in the past month, at the same time as commodity optimism has moderated. It appears that sentiment on both asset classes remains inextricably linked (Charts 3-4, p2).

Click here for the full report

Investors insure against insurance stocks

Written by Julien Mueller | 19 May 2016
Posted in Special research

Negative stock price developments of European insurance companies cause frustration among the investment community. The sentix Sector Sentiment for European insurance stocks falls to a 12-month low in May. A potential buy opportunity could emerge.

sentix Investmentmeinung 19-2016

Written by Manfred Hübner | 17 May 2016
Posted in sentix Weekly

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Wäre die Technik doch nur besser!

Die sentix-Daten senden positive Signale für die Aktienmärkte. Sowohl das bearishe Sentiment als auch der steigende Strategische Bias (und damit in Summe der Time Differential Index) notieren auf Indexständen, die statistisch positive Aktienreturns erwarten lassen. Dennoch verändern wir unsere Einschätzung (noch) nicht. Denn neben der Saisonalität ist es vor allem die Technische Analyse, die bei DAX und EuroSTOXX 50 uns noch der negativen Einschätzung gewogen machen. Beim S&P 500 liegt die Sache ein wenig anders.

Geänderte Einschätzung: S&P 500

Klicken Sie hier für die aktuelle Investmentmeinung (sentix Registrierung erforderlich)

sentix ASR Essentials 19-2016

Written by Manfred Hübner | 15 May 2016
Posted in sentix Weekly

Poles apart on Banks and Real Estate

The latest sentix survey provides a view of investors’ current convictions on European sectors versus the market. A couple of themes emerge. For one thing, sentiment towards commodity-plays such as Basic Resources and Energy continues to improve, albeit investors have become more cautious on Oil’s medium-term prospects. For another, pessimism is still the dominant theme on Financials, with sentiment readings on Insurance hitting a 12-month low and readings on Banks versus the market firmly entrenched at the low-end of their historic range. This provides a stark contrast to the investor optimism that is evident on the Real Estate sector, with sentiment readings nearing their 2012 highs. Investor sentiment is poles apart on Banks and Real Estate. See p2 for charts.