Markets had another positive performance last week, with the S&P 500 up 1.5 percent and the STOXX Europe 600 gaining 0.7 percent.
Stocks rose as investors became more optimistic.
A quarterly survey conducted by E*Trade last week showed that 57 percent of active managers described themselves as bullish on the market, rebounding from the previous quarter's 52 percent.
The latest AAII Investor Sentiment weekly survey showed that 43.1 percent of investors were bullish, a jump of 15.2 percentage points from the previous week. Bearish views fell by 10.1 percentage points to 29.2 percent.
“Trade has acted like a wet blanket on the stock market, but the fundamentals remain strong. If we can get through this issue, the earnings growth story is positive enough to lift markets,” said Anthony Saglimbene, global market strategist at Ameriprise Financial.
However, Quint Tatro, managing director at Joule Financial, noted that bank stocks have underperformed this year despite a strong economic recovery. “The financials are giving us a warning sign that something’s coming that’s not being reflected in the other sectors,” he said.
As a result, Tatro has sold the big banks and is “very cautious on the rest of the market”.
Jason Goldberg, senior equity analyst at Barclays, is more optimistic. He expects improving loan growth and accelerating share buybacks to be supportive for bank stocks.
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