Sentiment amongst individual investors hit its lowest level since 2009, with market participants increasingly uneasy over growth prospects. The tech-heavy NASDAQ, home to many household favorites, is off to its worst ever start to a year.
As a result, our Momentum Dial shifts into a Negative reading through the end of April.
Despite a headline GDP report that showed a surprise contraction for the US economy in Q1, a larger than normal trade imbalance is to blame for the negative number.
Strong growth from the consumer suggests that a recession is not imminent. Our Fundamental Dial remains in a Positive position for now.
Despite a few high-profile misses, earnings season for the S&P has been largely positive, with 80% of companies beating bottom-line estimates so far. As a result, stock losses have come as a result of multiple contraction from one of the most expensive markets in history. While P/E ratios have come down, stocks remain far from cheap, and our Valuation Dial stays Negative.
Our Three Dials composite reading takes a step down from Neutral to Slightly Defensive, suggesting we take a bit of risk off the table in the face of growing uncertainty.
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