Swiss equities in high spirits

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Written by Manfred Hübner | 20 January 2019
Posted in Special research

Swiss equities have been among the above-average stocks in recent weeks. And this, even though the majority of shares corrected here as well. Nevertheless, the defensive nature of the Swiss stock exchange proved to be condu-cive to stability. This leads to a very positive investor sentiment.

Investor sentiment towards Swiss equities has risen sharply as a result of the recent positive price trend. The sentix sentiment barometer quotes at 33.3%. This is the highest value since the beginning of 2018, but the chart below signals that investors should also act more cautiously in the short term. Because if the stimulation is so good, setbacks are usu-ally not far away.

sentix Sentiment – Swiss equities

sentix Sentiment – Swiss equities

This is all the more true since the second level of observation – the strategic bias - does not follow. A market that lacks basic confidence is above-averagely risky. This is because there is a latent willingness to sell in the event of weak or de-clining basic confidence. At present, this basic trust is around the zero line.

So, there are several reasons not to act too carelessly with Swiss equities.

Background

The sentix Sentiment indices, which capture investors’ 1-month expectations for a broad range of financial markets, are calculated on a weekly basis since 2001 as part of the sentix Global Investor Survey. The sentix sentiment reflects human emotions – between greed and fear – of market participants. Negative sentiment extremes are usually a straight indica-tion for rising prices. High optimism, in contrast, may be a warning signal for an upcoming market consolidation. A sentiment divergence mostly indicates more important turning points.

The latest sentix Global Investor Survey was conducted from 17-Jan to 19-Jan-2019 with about 1.000 retail and institutional investors participating.

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