Investor Courage Mounting Even As Sentiment Remains Negative: Citi

Below-expectation releases of economic data in recent weeks appear to have taken a toll on investor sentiment. The recent PULSE report on US equity strategy from Citi analysts Tobias Levkovich, Lorraine Schmitt and Christina Wood points out worse-than-expected data released on jobless claims, manufacturing ISM and factory orders. Investor sentiment on the back foot ‘PULSE’ is an acronym for Price-Unanticipated-Liquidity-Sentiment-Earnings, all crucial elements of Citi’s US equity strategy, and their current status is shown below in this figure. The only element in negative territory is Sentiment. Citi’s Panic/Euphoria and Cyclical Expectations Model “Our Panic/Euphoria model retreated but remained in euphoria…