One of the surprising outcomes of the Great Recession was the lack of inflation that followed. Of course, this was contrary to expectations at the time as many prominent investors were positioning themselves for a resurgence in inflation. One major counterweight to these views was the bond market which continued to trade as if inflation was unlikely.The inflation argument made total sense as interest rates were at record lows, the federal government was running record deficit...
One remarkable development during this crisis has been the Federal Reserve's early and aggressive action. During the last crisis, they were slow to act and were myopically focused on inflation until the spring of 2008. In hindsight, the recession had started in the fourth quarter of 2007.They learned from these mistakes. Over the last decade, the Fed has been quite aggressive in meeting any sort of weakness with action especially since fiscal stimulus was absent for much of t...

Examining stock market sentiment is an important tool to help investors assess risk. It doesn't give any indication of the future move in price, but it does give investors insight into the potential move in either direction. For example, stock market (NYSE: SPY) sentiment was very bullish early in the year.

Speculative, momentum stocks without any earnings or revenue were seeing massive gains like Virgin Space (Nasdaq: SPCE). There was an explosion of volume in short-dated call options. Greed was dominant over fear. With the coronavirus catalyst, stocks plunged, wiping out gains from the past three years.

At the lows in March, the opposite dynamic took hold. Stocks were opening limit-down for multiple days in a row. The scope of the coronavirus was unclear, including the extent of a shutdown necessary to combat it. This led to fear being the dominant emotion. Short positions increased, and long positions were liquidated which created the conditions for a powerful, counter-trend rally which has gone further than many believed.

Sentiment Today

At the March lows, sentiment hit extreme bearishness on multiple timeframes. Today, sentiment is neutral on an intermediate and longer-term timeframe, while it's reached excessively bullish levels on a shorter timeframe. This is clear with the CNN Fear/Greed Index which is in the mid-40s. At the beginning of the y...

What is a Bear Market? The Dow Jones Industrial Average (NYSE: DIA) broke the longest Bull Market in history on March 11, entering what is called a 'Bear Market'....
What is a Bear Market? The Dow Jones Industrial Average (NYSE: DIA) broke the longest Bull Market in history on March 11, entering what is called a 'Bear Market'....
What is a Bear Market? The Dow Jones Industrial Average (NYSE: DIA) broke the longest Bull Market in history on March 11, entering what is called a 'Bear Market'....
What is a Bear Market? The Dow Jones Industrial Average (NYSE: DIA) broke the longest Bull Market in history on March 11, entering what is called a 'Bear Market'....
Stock Market Triggers 'Circuit Breaker'... The S&P 500 Index (NYSE: SPY) plummeted more than 7% shortly after market open on Monday, prompting a 'circuit breaker' to halt trading for...
Stock Market Triggers 'Circuit Breaker'... The S&P 500 Index (NYSE: SPY) plummeted more than 7% shortly after market open on Monday, prompting a 'circuit breaker' to halt trading for...
Stock Market Triggers 'Circuit Breaker'... The S&P 500 Index (NYSE: SPY) plummeted more than 7% shortly after market open on Monday, prompting a 'circuit breaker' to halt trading for...
Stock Market Triggers 'Circuit Breaker'... The S&P 500 Index (NYSE: SPY) plummeted more than 7% shortly after market open on Monday, prompting a 'circuit breaker' to halt trading for...
Market Corrections: Definition and Risk... Major U.S. stock market indexes have fallen into correction territory, or a decline of 10% or more in the price of a security from its most...
Market Corrections: Definition and Risk... Major U.S. stock market indexes have fallen into correction territory, or a decline of 10% or more in the price of a security from its most...
Market Corrections: Definition and Risk... Major U.S. stock market indexes have fallen into correction territory, or a decline of 10% or more in the price of a security from its most...
Market Corrections: Definition and Risk... Major U.S. stock market indexes have fallen into correction territory, or a decline of 10% or more in the price of a security from its most...
The Difference Between Defensive and Off... When looking to boost your portfolio, it is best to have a mix of cyclical, or offensive, and non-cyclical, or defensive stocks. A stock tha...
The Difference Between Defensive and Off... When looking to boost your portfolio, it is best to have a mix of cyclical, or offensive, and non-cyclical, or defensive stocks. A stock tha...
The Difference Between Defensive and Off... When looking to boost your portfolio, it is best to have a mix of cyclical, or offensive, and non-cyclical, or defensive stocks. A stock tha...
The Difference Between Defensive and Off... When looking to boost your portfolio, it is best to have a mix of cyclical, or offensive, and non-cyclical, or defensive stocks. A stock tha...
Two Investing Lessons from Warren Buffet... Warren Buffett is possibly the greatest investor who ever lived. His success is a testament to the power of compound interest, good judgment...
Two Investing Lessons from Warren Buffet... Warren Buffett is possibly the greatest investor who ever lived. His success is a testament to the power of compound interest, good judgment...
Two Investing Lessons from Warren Buffet... Warren Buffett is possibly the greatest investor who ever lived. His success is a testament to the power of compound interest, good judgment...
Two Investing Lessons from Warren Buffet... Warren Buffett is possibly the greatest investor who ever lived. His success is a testament to the power of compound interest, good judgment...
Understanding Recession According to a new research study comprised of analysts from the MIT Sloan School of Management and State Street Associates, there is a
Understanding Recession According to a new research study comprised of analysts from the MIT Sloan School of Management and State Street Associates, there is a
Understanding Recession According to a new research study comprised of analysts from the MIT Sloan School of Management and State Street Associates, there is a
Understanding Recession According to a new research study comprised of analysts from the MIT Sloan School of Management and State Street Associates, there is a

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