Weekly Sentiment Survey: Bulls and Bears in Equal Measure

Note: It turns out that doing a survey each week is a lot of work! Plus, our team doesn’t really change its overall market sentiment each week. So, we’re going to move this to every other week.

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: 1

Commentary: Of the 10 contributors who responded, four were bulls, three were neutral, and three were bearish. Overall, that continues the mixed results we saw last week. On the plus side, our biggest bear is a little less bearish this week!

Question 2

Positioning: How are you currently positioned?

Score: -1

Commentary: Remember that bear I mentioned above? Well, his growl may be softening, but he’s still positioned to the short side. That’s why our score is negative. Otherwise, we’d be flat, with an equal number of bulls and bears.

Question 3

Risk: How would you rate overall market risk?

Score: -6

Commentary: There were only two answers this week. Four members of the team think risk is neutral, while six think it’s elevated. That’s the closest to a consensus we’ve gotten.

Question 4

Opportunity: Do you anticipate an increase or decrease in risk levels?

Score: 0

Commentary: There’s definitely no consensus when it comes to the future. Four team members think risk will risk, while four see risk on the decline.

Question 5

Portfolio Activity

Score: -2

Commentary: Similar to last week, our team is mostly neutral. That doesn’t mean they’re sitting on their hands. On the contrary. This is when they make shorter-term trades. Still, our overall result of -2 is the result of our largest bear preferring to short the market opportunistically.

Part 2: Qualitative Questions

As I write this, NVDA, AAPL, GOOGL, MSFT, AMZN are all either breaking down or in medium-term downtrends. Is this a warning sign for the big indexes?

Again, the team is split on this topic. Five members believe that this is a warning sign. Five say not to worry.

Quotes from the Warning Sign side:

Definitely a warning. The hyperscalers are facing AI inflation for memory, GPUs and other components, and free cash flow is dropping like a stone while debt issuance continues to increase.
Yes, but I believe rotational action will keep damage limited.
I’m nervous about the AI and chip sector. MU should not need to “save” the sector. I think selling will reemerge. Also, consumer tech facing inflation as the competition for chips is real.
I don’t like crypto under so much pressure and so clearly linked to the DATs (Digital Asset Treasury Companies).

Quotes from the Not to Worry side:

Not really, just a rotation until after the quarter is over.
No. I expect the Mag 7 companies to stabilize and act as a catalyst to drive the Nasdaq to new highs.
Those stocks are tired. They’ve had an amazing run. The Slack is being picked up by names like Micron and Intel. I think it’s a rotation within tech.

What companies will have the biggest impact next week? Why?

Nike (NKE) earnings expected on Tuesday
Micron (MU): great earnings and lots of chatter around the July ADR listing of SK Hynix. Can MU regain its momentum?
Apple (AAPL): A rebound in AAPL would help sentiment dramatically
And… not company-related, but one person is looking for Trump to juice up the market with a comment or two in honor of the nation’s 250^th birthday.

What stock are you most bullish on? Why?

Micron (MU): Two calls for this one, based on the comments above.
Marvell (MRVL)
Small cap data center and space stocks (excluding SPCX)
Cannabis stocks based on government rescheduling, which will allow for uplisting.
Nuclear and critical minerals stocks
Biotech in general, because it’s benefitting from rotation

What stock are you most bearish on? Why?

Oil and energy
Software is so bad it’s even dragging Palantir (PLTR) down
Mag7/Large tech/AI/Chips because of margin pressures, inflation fears, and CAPEX concerns
Housing