Both US and local stocks are bouncing on cue helped by a market that found itself positioned with a record bearish bias resulting in a dearth of fresh sellers without supporting bad news but as the chart below illustrates this is slowly moving back to more sustainable levels as global indices grind higher. In our opinion sentiment still remains a touch too bearish across major indicators and as we’ve discussed over the last few months it’s this very same ingrained negative outlook towards risks assets that’s been the catalyst to allow equities to recover from their mid-June lows even if most investors continue to worry around the economic risks of soaring inflation/rate rises and a looming recession.
