The latest magazine cover indicator is out.
Bullish Barron’s covers have been used in the past, unscientifically, as a contrarian indicator that stocks were about to be toast.
And so, for anyone scouring for any evidence that stocks are going downhill from here, this is one place to look.
Gluskin Sheff’s David Rosenberg, who called himself a “reformed bull” in a client note Tuesday, characterised this as a “source of concern”:
“This was not something I expected to see this weekend — the Barron’s front cover (is that bull really smiling?) and the story being the Wall Street strategist survey. Not one of the 10 strategists featured in the survey see the market lower at year-end. All 10 see Treasury yields higher, even if modestly.
“Talk about groupthink.”
Rosenberg also highlighted other signs that stocks are in for more pain. They include the American Association of Individual Investors’ survey which showed 32% of respondents were bullish, and mounting outflows from equity-based mutual funds.
The last really bullish Barron’s cover came in the 2015 outlook issue last December, in which none of the top 10 Wall Street strategists surveyed was bearish on stocks.
Year-to-date, the S&P 500 is down about 5%, following the big sell off in August.
So maybe the cover is worth more than a grain of salt as a market indicator. Except that it definitely isn’t.
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