Fund Managers Bullish. Ding Ding!
There's an old Wall Street saying: "They don't ring a bell at the top".
Here's a hint, though. Last week Merrill Lynch released its latest survey of fund managers. Merrill has apparently been doing this survey since 1999. It covers 302 managers with almost $1 trillion under management. A record 59% of them are over-weighted in equities. Ding Ding!
Some further points from the survey (http://www.ml.com/?id=7695_7696_8149_46028_46688_47167) : These professionals (often a good contrary indicator because they are the market) are relatively bearish on the US stock markets (and the dollar), which prolly (as my kids say) means they'll outperform the preferred locales, viz. Japan and the so-called "emerging markets". Energy and industrials are the most popular sectors among these cognoscenti.
They're bearish on bonds, though, apparently, with 57% underweighted in fixed-income. I'm pretty bearish myself on this sector, and have been, wrongly, for the last year at least, so maybe I'm going to be wrong again.
I read an interesting paper a couple of days ago about the whole US currency problem. The author is one Nouriel Roubini, of NYU's business school (my alma mater, as it happens). See: www.stern.nyu.edu/globalmacro/ BW2-Unraveling-Roubini-Setser.pdf . This would certainly tend to make you pretty bearish on the US bond market. An interesting sidelight, though, on the Chinese currency peg: one way for the tectonic pressures to be relieved, theoretically, would be for US prices to rise more slowly than Chinese prices. What are the consequences of that for the nominal interest rate differential?
Here's a hint, though. Last week Merrill Lynch released its latest survey of fund managers. Merrill has apparently been doing this survey since 1999. It covers 302 managers with almost $1 trillion under management. A record 59% of them are over-weighted in equities. Ding Ding!
Some further points from the survey (http://www.ml.com/?id=7695_7696_8149_46028_46688_47167) : These professionals (often a good contrary indicator because they are the market) are relatively bearish on the US stock markets (and the dollar), which prolly (as my kids say) means they'll outperform the preferred locales, viz. Japan and the so-called "emerging markets". Energy and industrials are the most popular sectors among these cognoscenti.
They're bearish on bonds, though, apparently, with 57% underweighted in fixed-income. I'm pretty bearish myself on this sector, and have been, wrongly, for the last year at least, so maybe I'm going to be wrong again.
I read an interesting paper a couple of days ago about the whole US currency problem. The author is one Nouriel Roubini, of NYU's business school (my alma mater, as it happens). See: www.stern.nyu.edu/globalmacro/ BW2-Unraveling-Roubini-Setser.pdf . This would certainly tend to make you pretty bearish on the US bond market. An interesting sidelight, though, on the Chinese currency peg: one way for the tectonic pressures to be relieved, theoretically, would be for US prices to rise more slowly than Chinese prices. What are the consequences of that for the nominal interest rate differential?
posted by econoclast at 7:53 PM
0 Comments:
Post a Comment
<< Home