Chris Forte’s “Thoughts to Start the Day” – a bottom?

Posted on July 12, 2022 by Scott Shuda

Are we at the “capitulation stage”? If you believe that the retail investor is a barometer of a market top or bottom then there’s some very interesting evidence to ponder.

Bespoke Investment Group published an article on Seeking Alpha yesterday that said:

“Consumer sentiment towards the stock market has been declining, but the pace has really picked up in the last two months. According to the New York Fed’s monthly survey of consumer expectations, the total percentage of consumers expecting higher stock prices is at 33.8%. This is the lowest level in the history of the survey.”

There’s no question there are more retail investors today than in the recent past. In 2018 and 2020 sell offs, the bottoms were marked by retail investors being net sellers. Use whatever words you want, “Fear”, “Capitulation,” or “Exhaustion” . . . small individual investors are tossing their cards on the table and saying, “I fold.”

Is this “The Bottom”? Dunno. But in the past when the small folk have pushed themselves away from the table and headed for the buffet table for all you can eat shrimp, mini-corn dogs and the dessert station we are near a market turn.

QUICKIES
*On the Feed Ted Medina outlines seven healthy reasons he’s positive on Reliq Health (RELIQ), including rapid growth in patient lives under contract.
*Perma-Fix Environmental Services (PESI) is one of three suppliers to secure a framework contract by Nuclear Waste Services, part of the United Kingdom’s Nuclear Decommissioning Authority. PESI is covered by Breakout Investor Aaron Warwick.
*WELL Health Provides Update on Cybersecurity Unit and Shareholder Estate Planning by CEO posted by Ashleigh Day
*Plot twist: Small booksellers are thriving. More than 300 independent bookstores opened in the U.S. over the past couple of years, a “welcome revival after an early pandemic slump,” Alexandra Alter and Elizabeth Harris write. And people of color started many of them, diversifying the book business. – The New York Times
*S&P 500 EPS estimates are modestly positive for the quarter. Today it stands at 5.7%, but it’s distorted by energy profits which are enormous. Remove energy and it now stands at down 3% ex-energy. That’s an enormous difference and points to the profitability of energy companies right now. Actually there is high negative guidance in S&P 500 earnings. 71 companies issued negative guidance, highest since Q4 of 2019. We are finally starting to see analyst downgrades and we will probably see many more. – Bob Pisani, CNBC

A bookstore is one of the only pieces of evidence we have that people are still thinking. – JERRY SEINFELD


Good luck to all – Chris

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