Investor sentiment has been largely bearish in the recent period due to various risks in the global economy. But the analyst at Fundstrat, Tom Lee, sees an uptick of bullish sentiment in the near future. According to an AAII sentiment survey, which measures the short-term expectations of institutional investors, around 40% of investors believe that the stocks market will decline in the next six months. However, Lee sees it differently. He believes that cooling inflation, aided by the declining housing costs, will ease investor pessimism. As a result, he suggests that the S&P 500 stock market will rise 14% in the next year instead of falling 15% as assumed by investors.
Moreover, Bitcoin, the world's largest cryptocurrency, regained to $27,400 after dropping to $26,500 on Friday, although cyrptocurrency failed to acquire any gains above the $30,000 marks since April. But the recent US jobs report suggests that the hourly wage growth is increasing due to a decrease in the three-month employment average. This could be beneficial to stocks and crypto market given their latest correlation.
However, the Bank of America has predicted that the US economy may enter a recession this quarter, and the oil prices had some bearish downtrend in the last four weeks. But the Federal Reserve Chair, Jerome Powell, proclaimed that a recession was evitable earlier this month. From a long-term perspective, the decrease in headline inflation could suggest that the Fed may soon pause its interest rate hikes, which would drive bullish sentiment for both stocks and cryptos.
Austin Bailey
- 2023-05-15
Investor Sentiment To Uptick: Impact on Stocks and Cryptos
Fundstrat analyst Tom Lee suggests that investor sentiment could pick up in the near future due to cooling inflation and decreasing housing costs. Read this article to find out how it affects stocks and cryptos.
