Investors Intelligence Highest Bearish Reading Since 1995

Two sentiment readings released today show that investment professionals are currently at their most negative levels in at least a decade.  First, this week's reading of newsletter writer sentiment from Investors Intelligence showed that bearish sentiment rose to its highest levels in thirteen years.  The 49.8% of newsletter writers saying they are bearish is the highest reading since the level was at 50.9% in January 1995.

click to enlarge

This morning, Merrill lynch also released its monthly fund manager survey, and according to that report, pessimism on global equities is currently at an all-time high. 

Given the weak economy and crumbling financial sector, these negative views are understandable, but it's a little bit ironic that while investors are the most bearish they have been on equities in several years, companies so far this quarter are beating EPS expectations at a rate not seen in several years.  As shown in the chart below, while only 6% of S&P 500 companies have reported EPS, 76% of them have beaten forecasts.  If this pace were to continue it would be the highest beat rate since at least 1998.

Comments

[user 2lakes]

Yeh, lowered estimates. It's easy to beat that way. And you guys are the SMART money managers. Scary real scary. Good thing I manage my own.