SAVVY CONFIDENTIAL: A briefing for investors
Bulls Resurgent: Optimistic investment advisors have surpassed their pessimistic counterparts for the first time since Aug. 21 as optimism about U.S. stocks rose for the fifth straight week, according to a poll by the Investors Intelligence newsletter in New Rochelle, N.Y.
The poll, conducted late last week, showed that the percentage of independent investment newsletter writers who considered themselves bullish, or optimistic, about U.S. stocks rose to 44% from 41% the previous week.
Advisors who consider themselves bearish, or pessimistic about U.S. stocks, fell to 39.7% from 41.9% the previous week.
The five weeks of increasing advisor optimism follow a nine-week stretch when the percentage of bulls increased only once, as U.S. stocks suffered their worst quarter in eight years. Optimism hasn’t increased five times in a row since the six weeks ended July 17--just before the market’s summer dive began.
Ironically, technical analysts say rising optimism may be a negative sign for stocks’ rally in the near term. That’s because a rising percentage of bulls suggests investors may have little new cash to deploy to propel stocks higher.
By contrast, analysts note that when pessimists outnumber optimists, stocks may be poised to rise, because it implies the sellers have exhausted themselves and are hoarding cash that can be invested in stocks sooner than later.
The survey also showed that the percentage of advisors who were neither bullish nor bearish but expected a drop of no more than 10% in the next 12 months--a “correction”--fell to 16.3% from 17.1% the previous week.
Paying More to Sit: A New York Stock Exchange seat sold Wednesday for $1.275 million, $35,000 more than the previous sale, marking the second-straight price increase after a series of declines, the exchange said.
Owning a seat at the world’s biggest stock exchange gives the holder the right to trade stocks and vote at NYSE meetings.
The last sale took place Oct. 15, at $1.24 million. That sale snapped a string of six straight drops in prices for seat sales after they peaked in March--when a seat changed hands for $2 million.
“It’s a reflection of optimism in business conditions,” said Hugh Johnson, chief investment officer at First Albany Corp. “The fact that it is edging up indicates some speculative spirits are alive and well.”
