The latest weekly survey of investor positioning and views on Twitter showed a slight rebound in overall net bullishness, but as with the action in the markets, it appears indecisiveness is a key theme. Indeed the equity investor surveys showed a continuation of the starkly different views on fundamentals vs technicals – presumably this represents investors holding on to the solid macro backdrop vs the confronting correction in prices.

But in the latest set of responses to the surveys one thing that really is starting to stick out to me is the change in views toward the bond market. Indeed there has been a notable turnaround in the perception of bond investors on the fundamentals (in contrast to equity investors), and the movement in overall net-bullish sentiment for bonds looks to be highlighting a risk of a big rebound in bond yields.

Things to think about from this review of investor sentiment are:

  • There remains a tension between fundamental vs technical driven sentiment.
  • The other tension is the divergence between equity market fundamental sentiment and bond market fundamental sentiment, which has turned around.
  • Indeed, the bond survey looks to be highlighting the risks of a more protracted reversal in yields.
  • On equity sentiment the main takeaway seems to be that there is this indecisiveness where investors are still holding on to the positive macro/earnings outlook vs the noise/news and downside risks.
  • 1. Fundamental vs Technical Sentiment: Not a huge change on the week, but there’s still a lot of information in this pair of charts. Fundamentals sentiment remains stubbornly high, albeit it does look to be slowly rolling over. Technicals sentiment on the other hand only managed a partial rebound – and as I mentioned at the start reflects what appears to be a sort of indecisiveness in the markets: on the one hand fundamentals look good, but on the other hand there’s a few things to worry about.

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