Weekly Street Sentiment: Sell-Side Looks Forward, Not Back

On One-Year Anniversary, Sell-Side Looks Forward - Not Back

Exactly one year since the beginning of the so-called end, the sell-side continues to suggest to their buy-side clients that the worst is behind us, or at the very least, not ready to return any time soon. Whether you want to attribute this to short-term memory, systemic optimism or an inability to jump off this six-month rally train without hobbling their career is still uncertain.

The last week was not only good for the market but also apparently good for the psyche, as well. Getting past the first week of September without a major market decline was enough to put a veritable spring in the sell-side step as overall sentiment grew by a heady 2.0%. Once again, the conversations that are percolating through Wall Street are hesitant to suggest that the buy-side take their chips off the table.

President Obama Speaks…and Nothing Happens

He came, he spoke and …nothing happened. On the bright side for his administration, at least that’s better than the tailspin that seemed to occur every time someone from the last administration decided to talk about the markets.

And, to be frank, when President Obama spoke to Wall Street on Monday afternoon, he could have hardly expected anything to rally based on his much anticipated and thoroughly unsurprising commentary discussing increased transparency and avoiding complacency.

Just getting through that speech without any “gotcha moments” seemed to be enough to elicit a collective sigh of relief from the industry.

It’s still too early to tell if there is any long-term impact the president’s comments might have, but Financials have recovered a bit of the sentiment lost over the last couple weeks and now are, along with six other industries, in the midst of an uptick in overall sentiment.

Sell-Side Continues to Suggest Market Has Room to Rally

In what continues to be the current mind-set of the market, the sell-side remains oblivious to anything that isn’t large, flashing and screaming “DANGER.” In short, they remain advocates of being long until there is a data point, be it economic or otherwise, that will be so incontestable that people will have no choice but to sell their positions. Clearly nothing in the president’s speech fell into that category and no economic data point has come close in the last couple months.

This market remains “reactive” instead of proactive, and as we begin to see the end of 2009 in our sights, the desire of market participants to continue to push this higher to the end the year on a strong note will likely grow.

Over the last week, seven industries saw meaningful increases in their sentiment numbers, including Financials and Basic Materials, which both were losing some of the lustre a couple weeks ago, and the consumer based industries along with Industrials, which all saw a second straight week of meaningful adoration by the institutional crowd. All in all, when the street is falling back in love with the consumer and Industrials, it doesn’t sound like they are very worried about much of anything.

Stocks the Sell-Side Likes and Dislikes This Week

As always, here are the five stocks that underwent the most dramatic shifts in sentiment from both a bullish and bearish point of view. As a note to those keeping score from last week, the most bullish financial stock this week could be found ranked at number eight. In fact, the eighth through thirteenth stocks ranked by bullish sentiment shift were all Financials. A far cry from last week!

Bullish:

Bearish:

Until next week …

Comments

[holmesnmanny:]

Ya, Obama's a real bad guy. He was handed a trillion + dollar deficit by deuchbag Bush and everyone just expects everything to fix itself. maybe he shouldn't have tried to do anything and let the financial industry completely dissentegrate. Yes, when you're dealing with the amount of money in the industry a lot of bad apples are gonna take what they want cause they have the power, but atleast he tried to do something. You can't make up a trillion and a half overnight.

Let's also allow the Republican's to bash him left and right for trying to reign in health care costs. You know what? Since when do the Republican's care about the elderly? Since when do the Republican's care about Medicare? Since when do the Republican's care about the average Joe. I can't think of another time in my lifetime. When the Republican's are rallying this much "supposedly" for the average Joe you know somethings up. I'm sure the big pockets of the health care industry is lobbying to kill this bill to keep prices out of control.

Every day it's a new lie from the Republicans about how Obama is gonna screw over the average Joe. It's really quite sad.

Sep 15 09:02 AM

[Steve in TN:]

Any reasonable person would prefer the far lower cost GOP health care plan over the trillion $ Obama plan. It's incredible that Obama does not want tort / malpractice reform. I guess he looks at the huge malpractice payouts as a lottery winning for his union supporters.

Sep 15 03:50 PM

[saltydog:]

who put joy global on the bearish list ?
it has gone up $2.51 by noon today.
it do not look like a bear to me

Sep 16 12:01 PM

[John S.:]

A bullish/bearish list in itself means nothing. Even if we did know whose opinion generated those lists, it would not be of much value to a discerning investor. Also, the presidential comments are stupid... both sides. The emotional diction and sardonic tones do not make your points more substantial.

Sep 22 06:41 PM

[holmesnmanny:]

I hate to say this, but the GOP don't have plans for universal health care. They don't have plans for any type of reform. They want everything to stay the way it is. Anything you hear from their representatives include "reform", but they never say what it is they want to do. Instead they simply just lie about Obama's plan.

It's typical Republican spin. Talk about doing good, without actually doing it.


On Sep 15 03:50 PM Steve in TN wrote:

> Any reasonable person would prefer the far lower cost GOP health
> care plan over the trillion $ Obama plan. It's incredible that Obama
> does not want tort / malpractice reform. I guess he looks at the
> huge malpractice payouts as a lottery winning for his union supporters.

Sep 24 04:55 AM