Wednesday, July 17, 2013

It's always darkest...

by Marketanthropology

Keeping in mind our note from last week that featured a contrarian perspective on China, we came across the latest BAML survey which paints a rather bleak outlook by fund managers on the ailing giant. So bleak in fact that sentiment among fund managers is in striking distance of the January 2009 low for the series. 
What's interesting to note as well is the sentiment crash is practically the mirrored equivalent of the massive and rapid rise in expectations that fund managers placed on China directly in the wake of Lehman. Pimco's "new normal" described in last week's note was born out of this exceedingly bullish sentiment environment when the intellectual and market zeitgeist looked to China as the torch bearer for the next stage and turned in horror away from the U.S. 
Needless to say - and reflected in the Shanghai composite's performance in 2009 and through today, the light burned bright then out.

Click to enlarge images

Judging by these lopsided sentiment figures, another dawn is near.

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