So far, the recovery from the February correction is proving *not* to be a “v-shaped recovery”, and rather seems to be in a process of undertaking a classic “double-dip recovery”. Headline risk has certainly been a driver, and at this point noise, sentiment, and signals are more intertwined than ever. So it’s timely to take a snapshot of where sentiment is sitting across a number of key indicators including the weekly survey on Twitter.
The high level message from the equity and bond outlook and positioning surveys on Twitter is that of a gradual and material shift in sentiment from the extremes around the turn of the year. Sentiment is immensely susceptible to being swayed simply by price, yet it can reflect a change in mood, and the perceptions around fundamentals can yield important insights.
In this respect, at once the charts show both a market that has undertaken a typical reaction to a correction in prices, while also showing scope for a further shakeout in sentiment and positioning. This is set against a backdrop of a steady shift in the perception of fundamentals. So it’s fair to say the risks are *not* one-sided at this point.
The bullet point conclusions and observations on sentiment and positioning are: