Tanking economic sentiment: But with that, I find myself in rare company these days.

This economy is teeming with bears and optimism is as hard to see as a week without a crypto hack.

Today, I explore why both ordinary traders and institutional investors have a low opinion of the stock market.

Wall Street’s confidence in the stock market has not been this low in over five years, based on Bank of America’s Sell Side Indicator.

This indicator is considered a gauge of investor sentiment and signals that investors are bracing for a downturn. “While the SSI does not capture every rally or decline in the stock market, the indicator has historically had some predictive power with respect to subsequent 12-month total returns of the S&P 500,” BofA analysts said on Wednesday. But they also pointed out that a second signal – the equity risk premium – shows that markets are pricing in an 80% chance of a mild recession and a 30% chance of a “full-blown” recession. And optimism only wanes when data points confirm the forecasts. BofA had previously predicted a recession before 2023, and this development confirms that hypothesis.

As a barometer of Main Street sentiment, let’s look at the once-popular retail investor app.

Seven million retail investors left $HOOD Robinhood last year. That’s a 34% drop. Investors are leaving the platform as stocks and cryptocurrencies lose momentum after the easy money days of the last two years. And the platform has taken notice and made changes, with Robinhood announcing plans this week to lay off 23% of its staff.
This veteran strategy chief warned investors not to fall for the recent stock market rally.

Michael Farr expects the current rebound to lose steam as recession fears climb. Instead, he recommends taking a beat from this four-part investing playbook.

Wealthy international buyers poured nearly $60 billion into the US housing market over the last year.

Foreign customers are showing confidence in American real estate with all-cash offers even as bearish analysts are calling for a potential crash. Good Luck Yours Thomas aka Doc Holliday