Why the stock market's running of the bulls might be about to kick off
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Phil Rosen
Apr 17, 2023, 17:10 IST
Reuters / Brendan McDermid
Welcome back readers. Phil Rosen here reporting from Manhattan.
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Optimists rejoice — Wall Street strategists just pinpointed a handful of trends, indicators, and gauges that all suggest 2023 could see a new running of the bulls.
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1. Between macro trends and investor positioning, Bank of America strategists think there's reason to bet on equities as the second quarter gets underway.
Any one of these, strategists wrote in a note to clients, could jolt the pessimism out of markets.
Right now there's a large swath of investors that aren't expecting a great year for stocks — including hedge funds, which have piled up their largest short position against the S&P 500 since 2011.
That, plus traders have flocked to money market funds with hefty cash positions. Those have now topped a record $5 trillion.
Lee said bearish investors are now "trapped" because the possibility of a downturn has already come and gone — and a key technical indicator just flashed.
"The S&P 500 has now spent more than 25 weeks above its 200-week moving average," Lee said. "Since 1950, there are zero instances of the S&P 500 making a new low once it has recovered above the 200-week moving average and spent at least 15 weeks there."
The part that makes Lee so certain?
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He says this under-the-radar technical signal has a 100% win ratio.
How are you positioning your portfolio for the rest of the year? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.
2. US stock futures rise early Monday, as investors brace for a crucial week of earnings reports to weigh recession risks. Here are the latest market moves.
3. On the docket: Charles Schwab, State Street, and more, all reporting.
6. China and India are buying so much Russian oil that Moscow's now selling more crude than it was before invading Ukraine. Kpler's Matt Smith told me that India has gone from a sporadic buyer of supplies to now relying on the warring nation for about half its total oil imports — and it's all happening while the West keeps sanctioning Russia.
7. JPMorgan's CEO Jamie Dimon is anticipating a storm ahead for the US economy. Banking sector woes, a hawkish Fed, and geopolitical tensions all contribute to an uncertain macro outlook, Dimon said. In any case, his company's doing just fine: JPMorgan posted record revenue for the first quarter of the year.
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