“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” — Sir John Templeton

If he was right, investor sentiment seems to support the idea the bull market may be around for a while. The American Association of Individual Investors’ most recent poll indicated investors aren’t feeling very optimistic.

  • 20 percent of investors were bullish – fewer than in the previous poll, and far lower than the historic average of about 39 percent.
  • 47 percent of investors were neutral – fewer than in the previous poll, and far higher than the historic average of about 31 percent.
  • 33 percent of investors were bearish – more than in the previous poll, and slightly higher than the historic average of about 30 percent.

Investors have had plenty to worry about. U.S. economic growth appears to be slowing which has created questions about the wisdom of a possible Fed rate hike. “Liftoff,” as some have called the much anticipated interest rate change, could also affect the global economy. The World Bank and International Monetary Fund have cautioned against a 2015 increase suggesting, “…a premature rate hike in the United States would exacerbate volatility in the world’s currency markets and hurt the global economic recovery.

The Fed isn’t investors’ only worry. Last week, the International Monetary Fund walked out of Greek debt negotiations. The BBC reported:

“Greece is seeking a cash-for-reform deal, to avoid defaulting on a €1.5bn debt repayment to the IMF… The EU and IMF are unhappy with the extent of economic reforms the Athens government is offering in exchange for the release of a final €7.2bn (£5.3bn) in bailout funds. Their bailout deal with Greece runs out at the end of June.”

If negotiations fail, Greece may be forced to leave the Euro which the BBC said could make the country a pariah in international markets. U.S. stocks finished the week higher despite losing value when Greek debt negotiations stalled.


Data as of 6/12/15

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor’s 500 (Domestic Stocks)

0.1%

1.7%

8.5%

16.5%

14.0%

5.7%

Dow Jones Global ex-U.S.

0.8

5.4

-4.3

9.7

5.3

3.5

10-year Treasury Note (Yield Only)

2.4

NA

2.6

1.7

3.3

4.1

Gold (per ounce)

1.6

-1.4

-6.6

-9.7

-0.7

10.7

Bloomberg Commodity Index

0.3

-3.6

-25.1

-7.8

-4.6

-4.2

DJ Equity All REIT Total Return Index

0.4

-3.5

8.3

11.6

12.9

7.4

S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.  You cannot invest directly in this index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* “Death of the Bull Market?”

Sources:

http://www.sirjohntempleton.org/quotes.asp

http://www.aaii.com/sentimentsurvey?a=subnavHome

http://americasmarkets.usatoday.com/2015/06/11/world-bankers-message-to-fed-dont-hike-rates-until-2016/

http://www.bbc.com/news/world-europe-33099000

http://www.bbc.com/news/world-europe-32332221