Investors expect large gains in US stocks even as insiders sell

Markets were mixed on Monday.

In the US, the Dow Jones Industrial Average fell 0.3 percent but the S&P 500 rose 0.3 percent and the Nasdaq Composite rose 1.0 percent to a record high.

Elsewhere, the STOXX Europe 600 rose 0.3 percent and the Shanghai Composite surged 2.3 percent but the Nikkei 225 fell 0.8 percent.

Chinese stocks were buoyed by the People's Bank of China's addition of 700 billion yuan of one-year funding through its medium-term lending facility.

However, in the US, talks on a fresh fiscal stimulus failed to progress.

Still, some analysts remain optimistic on a US recovery.

“There’s enough fiscal stimulus in the pipeline that we think the economy continues to heal in the third and fourth quarters,” said Joe Quinlan, head of chief investment office market strategy at Merrill and Bank of America Private Bank.

Indeed, a Schroders survey showed that its sample of US investors expected the stock market to generate returns of 15.4 percent a year over the next five years.

This is as CEO are selling stock.

“So-called insiders have dumped more than $50 billion worth of shares since the start of May, according to TrimTabs Investment Research,” wrote Matt Egan at CNN. “Insider selling is at a pace unseen since 2006.”