Wednesday, 30 September 2020

Markets fall but analysts remain optimistic

Markets were mostly lower on Tuesday.

The S&P 500 fell 0.5 percent and the STOXX Europe 600 fell 0.5 percent but the Shanghai Composite rose 0.2 percent.

Despite the decline on Tuesday, many analysts remain optimistic on stocks.

“Our stance on equities is still constructive in the medium-term, even if it’s bumpy ride due to risks including Brexit, U.S.-China trade friction and uncertainty around the U.S. election,” said Michele Morganti, equity strategist at Generali Insurance Asset Management.

WealthWise Financial CEO Loreen Gilbert said that the US stock market will return to all-time highs this year. “We are in a bull market run,” she said.

JPMorgan Private Bank’s head of equities strategy Grace Peters said she sees “around a 10% upside over a 12-month view”.

Canaccord Genuity strategist Tony Dwyer said that “excess liquidity” and “a synchronized global recovery” have created an environment “that really sets the stage for intermediate-term opportunity”.

Tuesday, 29 September 2020

Markets rise, but “to remain choppy for a bit longer”

Markets rose on Monday.

The S&P 500 jumped 1.6 percent, the STOXX Europe 600 surged 2.2 percent and the Nikkei 225 rose 1.3 percent.

Despite the rally on Monday, analysts remained cautious for the near term.

Mike Wilson, chief US equity strategist for Morgan Stanley, said the recent rough spell for stocks will “bleed into October as visible risk events linger”.

Morgan Stanley’s equity strategist Graham Secker wrote in a note that “we expect markets to remain choppy for a bit longer”.

Over the longer term, however, analysts were somewhat more optimistic.

“Looking at the micro picture suggests this is just a correction in a new bull market and the best opportunities remain in reopening beneficiaries,” said Wilson.

Monday, 28 September 2020

US stocks in longest losing streak since Aug 2019

The S&P 500 fell 0.6 percent last week, its fourth consecutive weekly decline, matching the longest losing streak since August 2019.

Some investors are questioning whether the recent selloff in stocks heralds a longer period of volatility.

“The action that we have seen this week makes me less confident that this is a healthy correction,” said Willie Delwiche, investment strategist at Baird. “The lack of stimulus, the uptick in coronavirus cases, the tension coming out of D.C. overall lends to an environment that is going to be a little bit harder for stocks to remain relatively sanguine through.”

Wells Fargo head of equity strategy Chris Harvey thinks it is too risky to put new money in stocks right now.

Harvey cited uncertainties over the COVID-19 pandemic and the US presidential election as contributing to downside risks, although he remains “longer-term positive”.

In contrast, Nomura Asset Management Co-Manager of the Global High Conviction Fund Ilan Chaitowitz told CNBC last week that investors should stay the course.

Chaitowitz said that the recent uptick in COVID-19 cases should be treated as a seasonal phenomenon and investors should position for infection rates to “collapse” heading into spring.

Chaitowitz also said that progress on COVID-19 vaccines provide cause for optimism, as did Barclays analysts Ajay Rajadhyaksha and Amrut Nashikkar, who suggested that a vaccine is now a matter of “when, not if”.

Saturday, 26 September 2020

Markets mixed, “trend remains bearish”

Markets were mixed on Friday.

The S&P 500 jumped 1.6 percent but the STOXX Europe 600 dipped 0.1 percent.

Earlier in Asia, the Nikkei 225 rose 0.5 percent but the Shanghai Composite fell 0.1 percent.

Mark Newton, managing member at Newton Advisors, said in a note that “there are still no real signs of strength” and that “the trend remains bearish”.

“After a buoyant and hopeful summer, financial markets are cooling in the face of reality,” strategists at MRB Partners said in a note.

In the meantime, Europe continues to battle a resurgent COVID-19 pandemic, with the UK and France reporting their most daily cases on Thursday and Spain considering imposing a total lockdown on the capital Madrid.

“New restrictions in Europe, less fiscal support, fading liquidity impulse and election risk should weigh on activity in Q4,” European equity strategists at Barclays wrote in a note.

Friday, 25 September 2020

Markets mixed, COVID-19 cases hit record highs in Europe

Markets were mixed on Thursday.

The S&P 500 rose 0.3 percent but the STOXX Europe 600 fell 1.0 percent and the Shanghai Composite tumbled 1.7 percent.

Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, noted: “People are getting concerned about what kind of economic recovery we’re going to get in the next few months.”

Indeed, Goldman Sachs has slashed its US fourth-quarter GDP forecast to 3 percent from 6 percent on an annualised basis, noting that “any further fiscal support will likely have to wait until 2021”.

In Europe, the resurgence in COVID-19 remained a concern as the number of cases reached a record high of 52,418 over a rolling seven-day average on Tuesday, according to CNN.

The UK recorded its highest number of daily cases on Thursday at 6,634, and credit rating agency S&P Global now sees the UK GDP declining 9.7 percent this year.

Peter Drobac, a global health physician and director at Oxford University's Skoll Centre for Social Entrepreneurship, said that “we're losing control of this” and warned that “winter could be a perfect storm”.

Thursday, 24 September 2020

US stocks plunge as economic recovery loses momentum

Markets were mixed on Wednesday.

The S&P 500 plunged 2.4 percent but the STOXX Europe 600 rose 0.6 percent. The Nikkei 225 dipped 0.1 percent.

Data from IHS Markit on Wednesday showed that its flash US composite PMI slipped to 54.4 this month from 54.6 in August while its flash eurozone composite PMI fell to 50.1 in September from 51.9 in August.

“The news flow has been negative on the virus and negative on growth,” said Ben Randol, senior FX strategist at BofA Securities.

“We’re at that phase where it’s harder to get that next bit of the recovery, that next bit of the reopening in place,” said Jason Pride, chief investment officer of private wealth at Glenmede.

Wednesday, 23 September 2020

Markets rise, UK reimposes COVID-19 restrictions

Markets were mostly higher on Tuesday.

The S&P 500 rose 1.1 percent while the STOXX Europe 600 rose 0.2 percent.

Earlier in the day, though, Asian markets fell, with the Shanghai Composite declining 1.3 percent.

The resurgence in COVID-19 cases remained a concern, dragging down many airline and travel-related stocks.

UK Prime Minister Boris Johnson told the British people on Tuesday to work from home where possible and ordered restaurants and bars to close early to tackle the resurgence in the country.

“We reserve the right to deploy greater firepower, with significantly greater restrictions,” he told parliament.

In the US, the death toll from COVID-19 exceeded 200,000 on Tuesday, by the far the highest number of any nation.

The University of Washington’s health institute is forecasting that the death toll will reach 378,000 by the end of 2020.

Tuesday, 22 September 2020

Markets fall amid reports of illicit bank transfers

Markets fell on Monday.

The S&P 500 fell 1.2 percent, the STOXX Europe 600 sank 3.2 percent and the Shanghai Composite fell 0.6 percent.

Markets took a hit after reports indicated that several global banks moved large sums of allegedly illicit funds over a period of nearly two decades.

The resurgence of COVID-19 in Europe also took a toll on markets, with UK scientists warning on Monday that the country could see almost 50,000 new cases per day in mid-October.

Saturday, 19 September 2020

Markets fall amid US-China tension and Europe COVID-19 resurgence

Markets were mostly lower on Friday.

The S&P 500 fell 1.1 percent and the STOXX Europe 600 fell 0.7 percent.

Earlier in the day, though, the Shanghai Composite jumped 2.1 percent.

Concerns about tensions between the US and China increased after the US Commerce Department said on Friday that it is prohibiting transactions involving Tencent’s WeChat and Bytedance’s TikTok, adding that “the President has provided until November 12 for the national security concerns posed by TikTok to be resolved”.

In Europe, concerns over the resurgence in COVID-19 was the focus of investors as several countries announced new restrictions on movement.

“We are now seeing a second wave coming in,” said UK Prime Minister Boris Johnson.

“If the uptick in cases becomes strong enough that lockdowns have to be tightened to a point that it derails the economic recovery, then it becomes a risk factor,” said Mobeen Tahir, associate director of research at fund house Wisdom Tree.

Friday, 18 September 2020

Markets fall, COVID-19 situation in Europe “very serious”

Markets fell on Thursday.

The S&P 500 fell 0.8 percent, the STOXX Europe 600 fell 0.5 percent and the Shanghai Composite fell 0.4 percent.

Following Federal Reserve chairman Jerome Powell's remarks on Wednesday that the economic downturn in the US is “the most severe in our lifetime”, World Bank chief economist Carmen Reinhart said at a conference on Thursday that a full recovery of the global economy “will take as much as five years”.

Indeed, Europe is seeing a renewed surge in COVID-19 cases.

“We have a very serious situation unfolding before us,” WHO’s regional director for Europe, Hans Kluge, said Thursday in a press briefing on the epidemiological situation in the region. “Weekly cases have now exceeded those reported when the pandemic first peaked in Europe in March.”

Thursday, 17 September 2020

Markets mixed amid “most severe” economic downturn

Markets were mixed on Wednesday.

The S&P 500 fell 0.5 percent but the STOXX Europe 600 rose 0.6 percent. Earlier in Asia, the Shanghai Composite fell 0.4 percent but the Nikkei 225 rose 0.1 percent.

The Federal Reserve kept interest rates near zero at its monetary policy meeting on Wednesday. It also said it planned to keep rates low until inflation is on track to “moderately exceed” its 2 percent inflation target “for some time”.

However, investor sentiment was pegged back after Fed chairman Jerome Powell said at a press conference after the meeting that the economic downturn resulting from the COVID-19 pandemic is “the most severe in our lifetime”.

Wednesday, 16 September 2020

Markets rise with China retail sales

Markets rose on Tuesday.

The S&P 500 rose 0.5 percent, the STOXX Europe 600 rose 0.7 percent and the Shanghai Composite rose 0.5 percent.

Stocks received a boost from a report from China showing that retail sales rose 0.5 percent in August from a year ago, the first positive report for the year. Industrial production rose 5.6 percent.

“We think that China’s economic recovery is on a reasonably firm footing now and should continue through Q4 and into 2021,” economists at Oxford Economics wrote.

In the US, industrial production rose 0.4 percent in August.

Tuesday, 15 September 2020

After pullback, S&P 500 to hit “new highs”

The S&P 500 rose 1.3 percent on Monday amid a slew of corporate dealmaking activity and optimism toward a coronavirus vaccine.

“Part of this move is from renewed hope for a vaccine,” said Peter Cardillo, chief market economist at Spartan Capital Securities, after AstraZeneca resumed phase three trials for its COVID-19 vaccine in the UK and Pfizer announced that a vaccine could be distributed in the US before the year-end.

“September has thus far lived up to its reputation, but I think that’s reversing again,” Cardillo said.

Meanwhile, Tony Dwyer, chief market strategist at Canaccord Genuity, said that the stock market’s September pullback was likely the first of many but he expects the bull market to persist nevertheless.

“The 7% correction in the S&P 500 SPX, +1.27% over the past six trading sessions is likely the first of a few 3-7% drawdowns followed by new highs as the market stair-steps higher like the fall of 2009, driven by election-year angst and the extended nature of the market-cap-weighted indices,” he said.

Monday, 14 September 2020

S&P 500 selling “to pick up”

The S&P 500 fell 2.5 percent last week, its second consecutive weekly decline, and some analysts think that it could fall further in the coming weeks.

Tim Hayes, senior investment strategist at Ned Davis Research, told Business Insider that he expects a 15-20 percent decline.

“Right now valuations and sentiment have priced in a much better economic and earnings outlook than we are seeing and than what is coming through the numbers. That is becoming a motivation for the momentum selling to pick up,” said Hayes.

However, Hayes thinks that the S&P 500 will stage a rally later once the US presidential election in November is out of the way.

“Once you get past the US election the uncertainty will clear up and by then market valuations may look better,” he said.

Paul R La Monica at CNN Business noted that most S&P 500 stocks had in fact been having “a pretty tough 2020”.

“Nearly 60% of the companies in the index were in the red for 2020 through Thursday's close, according to data from Refinitiv,” he wrote.

“Without Big Tech's influence, the broad market would not look quite as stable as it does today,” he quoted analysts from Zacks Investment Research as saying.

“The recent imbalances in the stock market can lead to vulnerability,” said Jeff Kleintop, chief global Investment strategist for Charles Schwab.

However, UBS said in a note on Friday that the market decline will likely be short-lived.

UBS noted that the trend in economic data “remains positive”, with the most recent Citi Surprise Index reading at 86.

In addition, UBS thinks further fiscal and monetary stimuli are possible, noting that the Federal Reserve's recent inflation policy overhaul “signals the Fed's greater willingness to tolerate inflation overshooting the 2% target before tightening policy”.

Saturday, 12 September 2020

Markets rise, “no-deal” Brexit looms

Markets rose on Friday.

The S&P 500 rose 0.1 percent, the STOXX Europe 600 rose 0.1 percent and the Shanghai Composite rose 0.8 percent.

“Investors should brace for more choppiness in the months ahead, with COVID-19 infection rates remaining in the headlines, U.S. elections approaching, U.S.-China tensions ratcheting up, and Brexit challenges lingering,” said Frédérique Carrier, head of investment strategy at RBC Wealth Management.

The European Union stepped up planning for a “no-deal” Brexit on Friday after Prime Minister Boris Johnson’s government said it plans to break international law by breaching parts of the Withdrawal Agreement treaty that it signed in January.

“Nobody should underestimate the practical, economic and social consequences of a ‘no-deal’ scenario,” said EU chief negotiator Michel Barnier.

Friday, 11 September 2020

Markets fall, “will remain volatile”

Markets mostly fell on Thursday.

The S&P 500 fell 1.8 percent and the STOXX Europe 600 fell 0.6 percent.

Earlier in the day, Asian stocks were mixed, with the Nikkei 225 rising 0.9 percent but the Shanghai Composite falling 0.6 percent.

“Until there’s a clear unambiguous, oversold underpinning, markets will remain volatile,” Quincy Krosby, chief market strategist at Prudential Financial.

Hussein Sayed, chief market strategist at FXTM, said in a note that “we should expect more volatility in the weeks to come heading into the U.S. presidential election” in November.

At its monetary policy meeting on Thursday, the European Central Bank left its deposit rate unchanged at minus 0.5 percent and its refinancing rate at 0 percent while reaffirming it plans to leave rates at present or lower levels until inflation rises to converge with its target at 2 percent.

Thursday, 10 September 2020

Markets rebound but COVID-19 may still “spook consumers”

Markets mostly rebounded on Wednesday.

The S&P 500 jumped 2.0 percent and the STOXX Europe 600 rose 1.6 percent.

Earlier in the day, Asian markets had declined, with the Nikkei 225 closing down 1.0 percent.

“Broadly, the technology sector is leading the recovery,” said James Ragan, director of Wealth Management Research at DA Davidson.

However, Donald Calcagni, chief investment officer with Mercer Advisors, is wary of the tech sector following its recent rally. “Those gains didn’t make a lot of sense,” he said.

In addition, Calcagni remains worried about COVID-19, saying that reopening the economy with the virus still around is “going to spook consumers”.

Underlining the threat still posed by COVID-19, a trial for a potential vaccine being developed by AstraZeneca PLC has been halted after a participant was struck by an unexplained illness.

Wednesday, 9 September 2020

Nasdaq plunges into correction territory

Markets were mostly lower on Tuesday.

In the US, the S&P 500 tumbled 2.8 percent and the Nasdaq Composite plunged 4.1 percent, the latter falling into correction territory after declining 10 percent in three sessions.

Elsewhere, the STOXX Europe 600 fell 1.2 percent but earlier in the day, Asian markets were higher, with the Nikkei 225 gaining 0.8 percent.

Analysts cited remarks by US President Donald Trump on Monday threatening to “decouple” the US economy from China as contributing to the decline.

The sharp decline in US tech stocks in particular comes as many analysts are describing the tech rally as a bubble.

Andrew Parlin, founder and chief investment officer of investment advisory Washington Peak, said that “insanely high price-to-sales ratios highlight the total lack of realism embedded in the hottest growth stocks” and that a “shocking, spectacular and disorderly” market crash looms.

However, Blackstone's Byron Wien is more sanguine.

“There is a good part of the market that’s underpriced,” he said. “Airlines, transportation and hospitality have performed poorly, and some represent good value for patient investors who can tolerate the risk as a part of their portfolio.”

Also, while some of the market turmoil has been driven by US-China tension, “if there would be some reconciliation or some rapprochement between the U.S. and China that would restore normal relations, it would be interpreted favorably by the financial markets”.

Tuesday, 8 September 2020

Markets mixed, US tech sector in “bubble territory”

Markets were mixed on Monday.

The STOXX Europe 600 jumped 1.7 percent but Asian stocks fell, with the Nikkei falling 0.5 percent and the Shanghai Composite tumbling 1.9 percent.

Chinese stocks failed to gain from a report showing that exports rose 9.5 percent from a year ago.

“We expect export growth to stay robust in the rest of the year as the global economy recovers,” economists at Oxford Economics wrote in a note referring to China’s latest trade data.

Meanwhile, Wall Street was closed on Monday for a holiday after declining last week, and some analysts think the decline is not over yet.

“I think this is a good wake-up call and a reminder that there are risks out there,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management.

“I don’t think the sell-off is over. Nasdaq is up 83%s since March 23, the S&P is up 63%,” said Julian Emanuel, head of equities and derivatives strategy at BTIG.

However, most analysts think that the sell-off is likely to be temporary.

“The significant reduction in previously extreme long positions in Nasdaq by momentum traders should allow the equity market to recover over the coming weeks, as happened after the June 11th correction,” said JPMorgan analysts.

Still, Jonathan Bell, chief investment officer at Stanhope Capital, said that the US tech sector is in bubble territory.

“You’ve got exuberance on just a very small number of stocks. That’s certainly bubble territory,” said Bell.

Monday, 7 September 2020

S&P 500 pullback “normal” but leaves “a lot of scarring”

The S&P 500 fell 2.3 percent last week, with a particularly heavy fall of 3.5 percent on Thursday.

Still, some analysts remain bullish on the US stock market.

SunTrust Advisory chief market strategist Keith Lerner suggested that the decline is normal for a bull market.

“Since the current bull market kicked off in March, there have only been two pullbacks of more than 5%,” he wrote, noting that recent bull markets have tended to have three or four setbacks over the first nine months.

“We view the latest selloff as a bout of profit-taking after a strong run,” wrote UBS Global Wealth Management’s chief investment officer Mark Haefele. “Stocks are still well-supported by a combination of Fed liquidity, attractive equity risk premiums, and a continuing recovery as economies reopen from the lockdowns.”

Others, though, note an uncertain outlook for stocks.

“The mini-tech selloff on Thursday has left a lot of scarring,” wrote Stephen Innes, chief global markets strategist at AxiCorp.

Analysts at Wolfe Research cited a possible resurgence of COVID-19 this fall as children and college students return to school and flu season begins.

Michael Kramer, founder of Mott Capital Markets, suggested that an explosion in volumes related to the selloff and the S&P 500 closing below its uptrend “indicate that momentum is likely shifting”.

Meanwhile, John Hussman, president of Hussman Investment Trust, suggested in his latest article that “valuations have broken above every historical peak, and estimated future market returns have fallen beyond the lowest points in history, including 1929”.

“Overall, we have a hypervalued market that we associate with the worst prospective 10-12 year market returns in the history of the U.S. financial markets, along with extreme bullish sentiment, tepid participation, breadth, and leadership, as well as divergent implied volatility,” he wrote.

“In my view, it’s primarily the blind faith of investors in a ‘Fed backstop’ in recent months that has enabled an extension of market valuations to the most extreme levels ever observed in history,” Hussman said.

However, Hussman expects a “real amplification of downside risks”.

“In my view, even the Federal Reserve’s use of CARES funds to buy outstanding corporate bonds will not produce solvency across the mountain of commercial real estate, mortgage, consumer, municipal, and corporate debt that I believe is quietly deteriorating,” he said.

Saturday, 5 September 2020

Markets fall but “stocks still well-supported”

Markets fell on Friday.

The S&P 500 fell 0.8 percent, the STOXX Europe 600 fell 1.1 percent and the Nikkei 225 fell 1.1 percent.

Analysts remain optimistic despite the two-day fall in stock markets.

“Stocks are still well-supported by a combination of Fed liquidity, attractive equity risk premiums, and an ongoing recovery as economies reopen from the lockdowns,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.

A report on Friday showed that the US economy gained 1.4 million jobs in August, a pace that JJ Kinahan, chief market strategist for TD Ameritrade, described as “slow but steady which is actually a perfect thing to see overall”.

Still, Barry Bannister, head of institutional equity strategy at Stifel, warned in a note that with the cyclically adjusted price-to-earnings ratio of the stock market at or near levels last seen in the final two years of the 1920s and 1990s rallies, “the building (and inevitable bursting) of a bubble could make the market a ‘greater fool game’ challenge in the near-term and a modest return vehicle longer term, dashing the optimism of investors”.

Friday, 4 September 2020

S&P 500 plunges, possible “Minsky moment”

Markets fell on Thursday.

The S&P 500 plunged 3.5 percent, the STOXX Europe 600 tumbled 1.4 percent and the Shanghai Composite fell 0.6 percent.

“Tech stocks, and the overall market, hadn’t really had a bad day since June, so this is a healthy breather,” said Esty Dwek, head of global macro strategy for Natixis Investment Managers.

Pershing Square Capital CEO Bill Ackman said: “It’s certainly not the beginning of the end, but I would say we’re coming upon one of the more uncertain periods in American history.”

Less sanguine is Ron William, market strategist and founder of RW Advisory, who told CNBC on Thursday of a possible “Minsky moment” amid the “ongoing story of tech street, Wall Street and Main Street all diverging”.

In addition, with low ETF flows and a spike in VIX, William suggested that assets could fall by “20 to 30 percent or more”.

Indeed, Matt Egan at CNN noted that the VIX just hit its highest level ever at an all-time high for the S&P 500.

Daryl Jones, director of research at Hedgeye Risk Management, said that it is “a significant red flag”, suggesting that a “higher stock market on higher volatility is telling you that risk is increasing”.

Thursday, 3 September 2020

S&P 500 hits another record high amid “unprecedented” stimulus

Markets rose on Wednesday.

The S&P 500 rose 1.5 percent to another record high while the STOXX Europe 600 jumped 1.7 percent.

While the global tally for confirmed COVID-19 cases rose to near 26 million on Wednesday, leading infectious disease health expert Dr Anthony Fauci said that a COVID-19 vaccine could come by the end of 2020.

In the meantime, hopes for a rapid recovery in the US economy saw a minor setback on Wednesday after ADP reported that 428,000 private-sector jobs were created in August, fewer than an expected gain of 900,000 jobs.

“It’s a pretty substantial miss, but still much better than what we saw last month,” said Mike Loewengart, managing director investment strategy at E-Trade Financial.

Another report showed that US factory orders rose 6.4 percent in July for a third consecutive increase.

Also, Chris Armbruster, a portfolio manager at Kayne Anderson Rudnick, said that the “unprecedented fiscal and monetary stimulus, not only in the U.S., but around the world, is going to provide the economy with a bridge”.

Wednesday, 2 September 2020

Markets mixed amid positive global manufacturing data

Markets were mixed on Tuesday.

The S&P 500 rose 0.8 percent to a record high but the STOXX Europe 600 fell 0.4 percent.

Positive global manufacturing data helped markets, with JP Morgan's global manufacturing PMI rising to a 21-month high of 51.8 in August from 50.6 in July.

However, Lindsey Bell, chief investment strategist at Ally Invest, said the Federal Reserve’s ongoing stimulus is “a key backstop going forward”.

Tuesday, 1 September 2020

Markets dip as sentiment “extended”

Markets were mostly lower on Monday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.6 percent and the Shanghai Composite fell 0.2 percent.

A rise in COVID-19 cases across more than half of the US is keeping health experts concerned.

“I think the fall is going to be a bit of a mess,” said Dr Ashish Jha, director of the Harvard Global Health Institute.

Investment analysts, though, appear more sanguine.

“Over the course of the next eight weeks, we’re going to have a raft of announcements on a vaccine. If they are all positive, it’s going to trump everything,” said Quincy Krosby, chief market strategist at Prudential Financial.

Indeed, Sam Stovall, chief investment strategist for CFRA in New York, said that the new bull market that emerged from the February-March COVID-19 bear market could last three years.

Still, the bullish sentiment in the market has other analysts concerned.

“Retail enthusiasm for the market via commission-free trading apps plus the huge volatility earlier this year have led to a massive boom in options volumes,” analysts at Bespoke Investment Group wrote.

“In any event, the prevalence of call buying is in our view a clear-cut signal that sentiment is extended after a blistering equity market rally since March,” they added.