It’s been a brutal bear market for stocks in the USA, which houses roughly 60% of the world’s investible equities. But even though US interest rates are likely to continue rising, for the first time since the market peaked 11 months ago, we can start to believe the worst will soon be behind us.
In the same way that market timers put off selling until interest rates begin rising; they also wait until ‘capitulation’ before starting to buy once more. This is the time when losses have been so great and the outlook so poor, that equities are written off: a time when many are convinced share prices will never recover. It looks like we’re almost there now.
Results published yesterday of Bank of America’s monthly sentiment survey among global fund managers “screams macro capitulation, investor capitulation, start of policy capitulation.” A note published by BoA’s strategists added that in the light of these findings, US stocks are likely to bottom in the first half of next year when the Fed does a pivot on interest rates.
___STEADY_PAYWALL___The BoA report states fund managers are now most bullish on cash and most bearish on equities. The most crowded trades are long US Dollars, oil and ESG assets; short European equities, emerging markets and UK debt. Clear signposts for the contrarians. And those who fancy taking the road less travelled.
More for you to read today:
- Survey ‘screams’ capitulation with rally set for early 2023. The sentiment on stocks and global growth among fund managers surveyed by Bank of America Corp. shows full capitulation, opening the way to an equities rally in 2023.
- UK recession looms after Truss’s growth program backfires. A survey of economists anticipates a recession starting this year followed by zero growth until late 2023.
- Vladimir Putin’s cannon fodder. Russia is seizing men off the streets to fight and die in Ukraine.
- UK markets are on sale. Nobody wants to buy. UK stocks and bonds are trading at their lowest levels in decades.
- Netflix seeks ways to get subscribers to return after visits decline. Netflix Inc. earlier this year saw a worrying signal in its data: Users were coming to the streaming service less often.
- Survival tips for tech startups as funding dries up. After reaching sky-high valuations, tech companies the world over have seen the worst year of their lives amid surging inflation and interest rate hikes.
The DA’s Joburg leader Dr Mpho Phalatse has gone from medic to politician and from leading the opposition in SA’s biggest city to becoming its Mayor – and then being controversially deposed after an ally with 8 seats in the 270 seat Council switched sides. In this frank interview with Alec Hogg of BizNews, the reluctant politician explains why she is now fighting tooth and nail to prevent a return of the ‘corrupt’ ANC to its old ways, but fears the plundering of Joburg has already started. Phalatse unpacks events of a turbulent year and explains that she’s still working behind the scenes to get back the Mayoral chains. In the process, she also provides insights into the kind of challenges SA is likely to face after the 2024 National Election when political coalitions will become the norm.
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