Weekly Sentiment Survey: A Bit Less Bearish but No Less Cautionary
This week, the team seems a little more mixed. But still, worries abound.
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Part 1: TheStreet Pro’s Sentiment Survey Results
Question 1
Direction: Over the next 2-4 weeks, how do you feel about the S&P 500?
Score: 0
Commentary: Of the 9 contributors who responded, 4 were bulls, 2 were neutral, 2 were bearish, and 1 was very bearish. Overall, with the expansion in bulls and decrease in bears, that puts us solidly in the mixed camp!
Question 2
Positioning: How are you currently positioned?
Score: -1
Commentary: While we have an even number of bulls and bears (4 each, with 1 neutral), one of our bears continues with a high conviction on the bearish side and is net short. That conviction moves our overall positioning to the short side. Sorry, bulls, but if you disagree, one of you will have to get aggressively long.
Question 3
Risk: How would you rate overall market risk?
Score: -3
Commentary: While the overall market risk is believed to be lower this week than last, our team leans bearish. Why? Well, just 2 people believe the market is low risk, and 3 are neutral. 4 members believe that risk is elevated, and 1 of those feels it’s very high risk.
Question 4
Opportunity: Do you anticipate an increase or decrease in risk levels?
Score: -5
Commentary: The team remains in the camp that risk will be on the rise, though they might not agree on exactly when. Just 1 member thinks risk is declining, while 3 see no change in risk. Among the remaining 5, 4 believe risk will increase and 1 sees a significant risk increase.
Question 5
Portfolio Activity
Score: 0
Commentary: Let’s just say that our team is sitting on the fence when it comes to portfolio activity. 6 members of the team are neutral. 2 are rotating into more aggressive sectors and 1 is a broad seller. The “broad seller” selection carries double the weight of a “rotation” selection and cancels out the score of the 2 members rotating into aggressive sectors.
Part 2: Qualitative Questions
Are the major stock indexes broken? In what way?
The good news is that 5 of our 9 members do not think that the major indexes are broken, at least no more than usual. However, even a couple of those people think that caution is warranted because valuations are off the charts.
The other 3 who responded to this question say, heck yeah, the indexes are broken. Why? It’s the impact of the mega-cap, MAG7-type stocks. If you’re a Dougie fan, he spells it out here in the Daily Diary.
In the interest of full disclosure, I asked the question because I believe that passive investing as well as leveraged ETFs and options trading is skewing the indexes towards momentum and away from valuation. The purpose of a stock market is to foster healthy business investment and that’s no longer the game that’s being played.
What companies will have the biggest impact next week? Why?
SpaceX (SPCX), of course. The market cap on this one is pure silliness (my opinion), and 1 team member said it’s ridiculous that it surpassed Amazon (AMZN) by market cap.
Semiconductors, including Micron (MU): 1 person mentioned that this group is the most important because it’s so hyper-extended. MU will announce earnings on Wednesday.
AI companies and Apple will matter, too.
What stock are you most bullish on? Why?
Here are some ideas from our team:
Intel (INTC): Increased focus on the company’s involvement with Elon Musk and TeraFab
Haverty (HVT): No debt, solid chart, and a 5.3% dividend
Marvell (MRVL): Again, it’s a favorite holding in our TheStreet Pro’s Portfolio
Silicon Motion (SIMO): No reason given
Cannabis stocks: Improving fundamentals, favorable changes in legislation
Biotechs and small-caps because money is flowing to them from out of the MAG7
What stock are you most bearish on? Why?
AI-related infrastructure. It’s over-owned and cap spending cycle will not yield a reasonable ROIC.
Housing: Affordability vs. homebuilder market pressure and rates higher for longer
What economic data are you watching most closely? Why?
Inflation and jobs were the two most cited. On the inflation front, people are specifically looking at the Flash June PMI. Additionally, January 2027 WTI, looking to see if oil begins to drop as Hormuz opens.
Bitcoin, too. It just seems “off” right now.
What technical indicator are you watching most closely? Why?
Semiconductor Index: It’s only moved like this one other time in history-right before the Dotcom Bust.
Technical strength indicators in various sectors.
Generally, people are watching for trend and momentum in the major indexes.
