Investors have been pouring billions of dollars into stocks, leading BofA to conclude in a note earlier this month that “
It’s Getting Frothy, Man!“
Now Gluskin-Sheff’s David Rosenberg is out with a note highlighting two reasons why things might cooling down a bit. Here’s Rosenberg:
SOME SIGNS OF FROTH COMING OFF THE BOIL
First, the the IPO market is clearly cooling off so far in November, and investor bidding once the new issue hits the market has become far less aggressive. Let’s call it an encouraging development — greed is never good (sorry, Gordon) from a contrary perspective.
Second, there are still a plurality of bulls out there, but at the margin, the latest Investors Intelligence poll showed a downtick to 52.6% from 55.2% the week before, though the bear camp stayed low at 15.5% (from 15.6%). Still, the bull-bear spread pulled back 250 basis points, which is good from the perspective of getting out of the ‘danger zone’ from a complacency standpoint.
Meanwhile, markets continue to chug along and reach new highs.