It’s pretty ironic.
Wall Street’s analysts have a reputation for being too bullish on stocks. In fact, Reuters’ Nishant Kumar and Lawrence Wright had a big write-up about this on Thursday.
However, during the monster bull run of the last few months, analysts have been net negative when issuing their upgrades and downgrades.
Bespoke Investment Group notes that the recent negativity had been particularly peculiar. “Normally, a new year brings analyst optimism where outlooks on the year ahead are bullish,” they write.
In more recent weeks, it seems analysts have returned to wearing their rose-coloured glasses (see green bars in the chart below).
But with the stock markets up significantly, are we to take this as a good sign? Or is it a contrarian sell signal?
Photo: Bespoke Investment Group