The Big Number
The current measure of retail
investor sentiment as tracked by a weekly survey conducted by the
American Association of Individual Investors (AAII) is at its highest
level in 27 weeks.
What this means
Bullish retail investor sentiment
as tracked by AAII hit its highest level in 27 weeks, matching an
earlier peak reached just before the China trade talks fell apart in
May. In spite of all the noise and political drama, investors are
feeling better about the market.
Sentiment around the China trade
talks continued to improve with Lawrence Kudlow, the director of the
U.S. National Economic Council, saying that the “mood music is pretty
good.” In Washington, the public phase of the impeachment hearings
kicked off and was largely ignored by markets.
The Markets’ Reaction
Stocks were up for the
sixth week in a row, with the S&P 500 (SPX) climbing 0.9% to a new
record high. International developed markets trailed, up 0.1% (MXEA),
while emerging market equities fell -1.5% (MXEF). Spreads on investment
grade bonds were flat, and high yield spreads widened by five basis
What to Watch
Protests in Hong Kong continue to
intensify, and concern is rising that China will intervene militarily.
This week sees notes from the latest Federal Reserve meeting released on
Wednesday, and flash Purchasing Manager Index (PMI) data for the U.S.,
E.U., and Japan out on Friday.
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