by Michael Tarsala
As reported by David Berman at The Globe and Mail, 38% of the 261 respondents to the latest BofA survey believe corporate profits will fall in the coming 12 months, as operating margins decrease.
Also, a net 13% of respondents believe the global economy will weaken in the coming year.
They're grumpy. And they are supposedly the smart money, together representing $708 billion of investments.
And they join Bill Gross, who earlier this week tweeted out that the U.S. is, “approaching recession when measured by employment, retail sales, investment and corporate profits.”
Economists are down on the markets, too. A MarketWatch poll released early this week suggests the growth expectation of economists for Q2 is now 1.35, down from 2% just a month ago.
Is that in itself a contrarian signal that the market could strengthen, and to be greedy when others are fearful?
Perhaps not yet. There's a difference between economic bearishness and market bearishness.
The latest economic bearishness might have been taken as positive for stocks back in mid-May, when market sentiment was clearly at extremes.
But right now, market bearishness is 34.7%, vs. the long-term average of 30%, according to the latest weekly survey from the American Association of Individual Investors.
That is probably still not enough to prompt easy market gains from where the S&P sits today, near volume resistance around 1370.