From Andrew Thrasher:
We got another data set of sentiment data yesterday, this time from BAML. According to their survey of 254 fund managers, sentiment towards equities hasn't been this high since February 2011 (before the market dropped 6%), and their economic outlook hasn't been this rosy since April '10 (as the market topped out and fell roughly 15%).
"The new year sees asset allocators assigning more funds to equities than at any time since February 2011, while their confidence in the world's economic outlook has reached its most positive level since April 2010," according to the report released Tuesday.
A net 59% now expect the global economy to strengthen this year, compared to a net 40% a month ago.
Along with that, profit expectations have surged to net 29%, their highest. But analysts' earnings revisions will need trend higher to keep pace with rising expectations.
Does this mean we must see a correction in equities from here and drop 6-15%? Not necessarily. Equity markets have done practically nothing in the last three days and outside of the first day of trading in 2013 we have been a fairly tight range between 1455 and 1473 on the S&P 500.
As we approach the debt ceiling fiasco debate, we'll see if...
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