Wall Street Has Been 'Perma-Wrong' About The Stock Market

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

Wall Street’s ‘Perma-Wrong Record Is Intact’ (Josh Brown)

Chris Kimble at Kimble Charting Solutions points out that since August 13, 2012, the S&P is up 16%. He also points out that now the average Wall Street strategist’s stock allocation is at 49%, below the average over the last 15 years.

“The funniest thing ever is how Wall Street has this reputation for being permanently bullish and always sucking people in – and miraculously, unbelievably, they’ve managed to be not so bullish (even bearish) in the aggregate during one of the most powerful rallies of all time,” writes Josh Brown.

S&P 500 allocations

The Number Of Financial Advisors In The U.S. Will Keep Falling
(Investment News)

The number of financial advisors in the U.S. fell 1.3% or by 4,000 in 2011,  according to Cerulli Associates. This number is expected to fall by another 18,600 over the next five years. Independent broker dealers and registered investment advisors that largely rely on wirehouses and investment advisors to train new talent, have to figure out a new way to train them. The number of financial advisors is expected to fall from 316,109 in 2011, to 297,515 at the end of 2016.

Tobias Levkovich Thinks Stocks Will Go Higher This Summer (Citi)

The S&P 500 is in higher territory now than it was during the credit bubble but this doesn’t necessarily mean a sell-off is near. Citi’s Panic/Euphoria model argues that when investors are panicking its a good time to buy and vice-versa. Citi’s Tobias Levkovich writes that stocks could continue to rise this summer.

“[O]ne can see that as the markets have broken into new high territory, investors have become more worried given that the readings have slid deeper into neutral territory.

“In our minds, this would imply that share prices can move even higher in the near term and an S&P 500 overshoot to 1,650-75 is plausible by the summer followed by some giveback later in the year.”

citi panic euphoria

Advisors Join Morgan Stanley Wealth Management (The Wall Street Journal)

Alissa Carloss formerly with Stifel Nicolaus and Paul Bagnato formerly with Wells Fargo Advisors have joined Morgan Stanley’s wealth management unit. Carloss joins the Jackson, Tennessee office, and Bagnato is joining the Mount Kisco N.Y. office.

Investors Are Telling Themselves 3 Things To Explain The Divergence Between Stocks And The Economy (Bank of America)

Stocks are heading higher despite weaker than expected economic data. Investors don’t seem care about data anymore and this Bank of America’s David Woo says is for three key reasons. 1. While a data shows a slowdown, it doesn’t suggest a sharp decline in growth, “bad news is not bad enough.” 2. The Fed will continue to be accommodative. 3. The impact of the U.S. fiscal tightening is temporary and once it eases the U.S. economy will come out strong.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.