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Source: Source: Refinitiv Datastream | Reuters, June 8, 2023 | By Vincent Flasseur
Chart #2 —
The VIX is back to pre-pandemic levels
The VIX – also known as the "fear index" - fell below 14 over the past week, its lowest level since February 2020. A VIX at very low levels is synonymous with investor complacency.
VIX is short for Chicago Board Options Exchange Volatility Index. It is a measurement instrument used to track the volatility of the S&P 500 index and is the best-known volatility index on the market.
Source: Charlie Bilello
Chart #3 —
Investors are becoming increasingly optimistic
In another sign of market complacency, various investor opinion surveys show a clear rise in the level of optimism. The AAII Sentiment Poll (conducted among individual investors in the USA) shows that the percentage of "bulls" is 20% higher than the percentage of "bears", the widest gap since November 2021.
The NAAIM Active Manager Exposure survey (conducted among active managers in the USA) shows a "net long" level of 90%, also the highest level since autumn 2021.
Source: Charlie Bilello
Chart #4 —
Investors are chasing technology stocks
The Nasdaq index is by far the best performer among US equity indices since the start of the year (+26.7% versus +2% for the Dow Jones). In recent weeks, many investors have been adjusting their portfolios by accumulating technology stocks. This is evidenced by inflows in May, which reached their highest level since February 2021.
Source: BofA, TME
Chart #5 —
US ISM index shows downward pressure on prices
Among last week's macroeconomic highlights was the ISM purchasing managers' survey in the USA. Admittedly, the index itself shows a sharp contraction in service-related sectors, but the market took a positive view of the continuing fall in the price component, which points to a decline in service-related inflation.
Source: Longview Economics, Macrobond
Chart #6 —
Is the US banking crisis on the verge of resolution?
Deposits with US banks rose for the 3rd week running (+46.6 billion dollars).
Source: Bloomberg
Chart #7 —
Hedge funds up 2.2% since the start of the year
According to Aurum Research, hedge funds (on an aggregated basis) are up 2.2% in the first 5 months of 2023, with long/short equity funds posting the best performance.
Source: Aurum Research
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