British global bank and financial services group HSBC say the US stock market has likely bottomed.
In a new interview with Squawk on the Street, Max Ketner, the bank’s chief multi-asset strategist, said the S&P 500’s close of 6,343 on Monday could be a near-term low.
“(U)until very recently, we didn’t get a generally contrarian bias signal. We didn’t have any kind of strong signal that would tell us that everyone was pretty much out of the market. And that’s no longer the case as of last week.”
“We’re seeing that across the board from hedging, from skews and buy-in ratios to things like surveys, to things like systematic positioning as well, so I think it’s very likely that the decline has arrived.”
He says consumer sentiment and positioning indicators are flashing bullish signals for the stock market.
“As of last week, both systematic positioning but particularly discretionary positioning, particularly around the hedging side of things, has triggered the first proper buy signal for the broader risk asset group since liberalization day.
The matter is not limited to the precautionary aspect only, but also the methodological aspect. They are our momentum signals. It’s polls. Look at investor intelligence, look at AAII, it’s a combination of things. They are overly hedging. Maybe people are over-hedging, but they haven’t cut their prices and they’re not actually telling us they’re pessimistic.
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