Kolanovic Still Cautious Amid ‘Overbought’ Markets, ‘Complacent’ Sentiment
The raucous rally in stocks and bonds to end 2023 left markets "overbought and sentiment complacent."
That's according to JPMorgan analysts led by Marko Kolanovic, who's still cautious amid a familiar list of risks and prospective headwinds.
Although bullish sentiment in the AAII survey retreated during 2023's final week, it hit a YTD high just before Christmas. The familiar figure below is worth highlighting one last time before we forget all about 2023.
The sentiment surge was accompanied
Down in Little Boring Stock land, I spent today looking at an industry that is seeing price -15% to -30% (worst YOY as far back as my data goes), volume -10% (matching worst YOY outside of Great Recession and early pandemic), capacity in severe excess despite smallest players dropping out at -20% YOY rate, customers firmly in the drivers’ seat and crushing renegotiations, managements and analysts’ mood grim at best and funereal at worst. It’s a group I’ve been covering for 25+ years and you buy it when things are terrible and getting worse. Even waiting for things to start getting worse at a slower rate (2nd deriv +ve) has, more often than not, been a tad “late” in hindsight.
I sympathize with JPM and Morgan’s cautious views and a large part of me wants them to be right. But there is stuff to buy out there, and I’m seeing more of it lately.
Do tell.
In very general terms, I’m looking at some subsets of transports. Transports is stuff like railroads, truckers, logistics, air and ocean freight, etc. However, if you’re on recession watch, probably not where you’d want to be.
Much obliged. Every bit of direction helps.