British universal banking and financial services provider HSBC says the US stock market has likely bottomed out.
In a new interview on Squawk on the Street, Max Kettner, the bank’s chief multi-asset strategist, says the S&P 500 closing at a low of 6,343 on Monday could be the short-term low.
“[U]Until recently, we didn’t get this overall quite contrarian bias signal. We haven’t had a pretty strong signal yet that would tell us that everyone is pretty much out of the market. This is no longer the case since last week.
We’re seeing that across the board, from hedging, from skews and put-call ratios, to things like surveys, to things like systematic positioning, so I think we’ve most likely bottomed out.”
He says consumer confidence and positioning indicators are bullish signals for the stock market.
“Since last week, both the systematic positioning and especially the discretionary positioning, especially around the hedging side of things, has now really triggered the first real buy signal for the broader spectrum of risky assets since Liberation Day.
It’s not just the hedging side, it’s the systematic side. They are our momentum signals. They are surveys. Look at Investor Intelligence, look at AAII, it’s a lot of things. They are overprotected. Maybe people are over-hedged, but they haven’t cut back and they’re not actually telling us they’re bearish.”
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