Daily Stock Market Articles

No More Juice - The Rise and Fall of Orange Juice Futures
Tue, Jun 3, 2025

Over the past five years, orange juice futures have seen a wild ride, surging to record highs and then crashing just as dramatically. At the heart of it all has been a perfect storm of tightening supply and speculative hype.

Starting in 2020, the orange juice market began heating up. Florida's orange production was getting hammered by citrus greening disease, which is a long-standing bacterial infection caused by a bug that decimated groves across the state. On top of that, extreme weather events like hurricanes Ian (2022) and Milton (2024) only exacerbated an already weak supply backdrop. As supply dropped off, prices started creeping higher, and that’s when the financial players stepped in.



By 2022, hedge funds and other money managers began piling into orange juice futures. Prices, which historically hovered between $1 and $2 per pound, shot up, eventually peaking near $5.50 in December 2024 as OJ became one of the hottest trades in the agricultural commodities space. According to CFTC data, managed money had built up a near-record long position earlier in 2024, totaling about $260 million in speculative longs. These weren’t farmers or juice companies hedging their harvests, but instead mostly speculators betting on prices continuing to rise.

After OJ prices took the stairs up from 2022 to 2024, it took the elevator down to start 2025. Given the build-up in speculative positions, it didn't take much to spark a rush for the exits when Trump's tariff threats began earlier this year. Canada and Mexico are by far the two largest importers of US orange juice, and when President Trump began fighting with those two countries on trade at the start of his second term, OJ futures cratered from more than $5.25 in mid-December to less than $2.25 by April. The thin market in the commodity magnified the move, with relatively small volumes leading to outsized price swings. In the entire history of the Orange Juice futures contract, the four-month decline from the December high was the largest on record!



Domestic fundamentals for OJ remain shaky. The USDA forecasts a 25% drop in Valencia orange production this season in the US, with Florida’s output expected to be 38% smaller than last year’s. Greening disease continues to harm groves, and Florida’s citrus acreage keeps shrinking due to both infection and land development.

While the US supply picture looks bleak, the global story shifted in early 2025. As Florida’s production has collapsed nearly 90% since 2005, the US has leaned more heavily on imports, especially from Brazil and Mexico. In 2024, the US brought in over 400,000 metric tons of orange juice, the highest level in nearly a decade. Then, in early 2025, Brazil projected a massive crop rebound of 300 million boxes, up 30% from the previous year. Along with US tariff concerns, Brazil’s expected surge in supply also contributed to OJ's price drop.

So where do we go from here?

In the short term, orange juice futures have stabilized in the $2.75–$3.25 range. If the new Brazilian supply materializes, it would ease scarcity concerns and likely keep downward pressure on prices, especially with the U.S. relying heavily on imports. The effect could be even stronger if the Brazilian real stays weak, making exports to the US more attractive.

That said, there’s still a plausible bullish scenario. The National Hurricane Center is forecasting another above average season of tropical activity in the Atlantic, and if one of those storms were to hit Florida this year, or if greening disease worsens, supply could be disrupted again in both the US and Brazil, potentially pushing prices back above $4. And if inflationary pressures resurface, agricultural commodities could catch another bid from macro traders.

Ultimately, this market remains highly reactive. It doesn’t take much to move the needle when fundamentals are tight and speculative money is involved. If you’re trading orange juice futures, it’s less about slow and steady fundamentals and more about who’s in the trade, how fast they’re moving, and whether the supply narrative is tightening or loosening. For now, the squeeze is easing—but it wouldn’t take much to bring the juice back.

 

NASDAQ & Russell 2000 have fared best in post-election year Junes

Over the last 54 years June has favored NASDAQ ranking sixth best with a 1.0% average gain, up 31 of 54 years (since 1971). This contributes to NASDAQ’s “Best Eight Months” which ends in June. However, June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.2%. S&P 500 performs similarly poorly, ranking ninth, but with a 0.2% average gain. Small caps have tended to fare better in June. Russell 2000 has averaged 0.8% in the month since 1979 advancing 63.0% of the time. During the bear market in 2022, Russell 1000 and 2000 suffered their worst June losses ever, dropping 8.5% and 8.4% respectively. S&P 500 and NASDAQ also declined by over 8% that year.

June is the second worst DJIA month in post-election years, averaging a 1.0% loss with a record of fourteen full month declines in eighteen years. For S&P 500, June is #9 with an average loss of 0.5% (7-11 record). Post-election year June ranks #8 for NASDAQ and #7 for Russell 2000 with average gains of 0.8% and 1.2% respectively.

 

12 Amazing Facts About the Dow Jones Industrial Average on Its Birthday


We had a big birthday last week, as the Dow Jones Industrial Average turned 129 years young! It is the second oldest index (the Dow Jones Transportation Average is older) and was first calculated on May 26, 1896 by Charles Dow, co-founder of both the Wall Street Journal and Dow Jones & Company.

It started as 12 companies, representing the big parts of the economy at the time, like leather, steel, and sugar. It was meant to gauge the overall health of the industrial sector. Of course, today it is 30 of the largest publicly traded companies (as it has been since October 1928) and is still widely considered one of the most well-known and cited indices in the world, but it is also one of the best gauges for the overall health of the US economy.

Here are 12 fun stats to celebrate the big birthday:

• None of the original 12 are left. General Electric was the most recent of the 12 to be included, but was it removed October 2018. Another fun stat, it was removed two other times in 1898 and again 1901, for a total of three times.
• It started with 12 stocks, but moved to 20 in 1916 and 30 in 1928. To this day, many think 30 is still too small of a sample size, but it doesn’t look like this will change anytime soon.
• A committee at the S&P Dow Jones Indices picks the components and there isn’t a ridged process or formula.
• The best year ever? A cool 82% gain in 1915, which also happened to be in the middle of World War I.
• 1931 takes the cake for the worst year ever, down nearly 53%. The Great Depression sparked this weakness, as stocks eventually fell 86% from their peak in 1929.
• It is price weighted, meaning a stock with a higher price will have more impact on the daily change. For example, when UnitedHealth Group (UNH) had their recent troubles, this made the Dow returns look worse than it was under the surface or compared with market-weighted indexes like the S&P 500.
• Average is in the name, but it isn’t an average, it is an index.
• It was up a record nine years in a row in the 1990s.
• It fell 20.5% on December 14, 1914 as World War I broke out, but the worst day ever was the 22.6% crash on October 19, 1987, better known as the Crash of 1987 or Black Monday today.
• The Dow has gained double digits in one day nine times, with the most recent off the COVID lows on March 24, 2020. The best single day ever was a 15.3% gain on March 15, 1933. Ides of March indeed.
• The best part about the Dow is how much wealth it has created over generations for investors (if you were able to track the index). It started trading at 40.94 and recently peaked at more than 45,000. And that doesn’t even include dividends! Along the way there have been many worries and concerns, yet stocks have eventually moved higher every single time. Here’s our always popular Chart of Worries showing just this.

• Lastly, it closed at about 100 in 1906 and 1,000 in 1972. It took till 1999 to get over 10,000 and recently peaked above 45,000 in December. The fasted 1k interval ever was only five days from 32,000 to 33,000 in March 2021. Any bets on when it breaks 100k?

Congrats again to the Dow on an amazing run and to all the investors over the years who have benefited by sticking to their investment plans.

 

The 50% Club Keeps Growing
Fri, Jun 6, 2025

As the S&P 500 flirts with closing 20% above its April 8th closing low, there have been several strong performers helping to drive the gains, and very few losers, with only 56 stocks in the index trading lower. While the rally has been broad, the largest stocks in the index have been driving the gains. Even as the index is up just over 20%, the average performance of the 500 individual companies has been four percentage points lower at 16.1%.

Of the S&P 500's biggest winners since 4/8 as of Friday afternoon, 19 stocks in the index have rallied 50% or more. A 50% rally over a year or two is incredible enough, but a surge of 50% in less than two months is rare, especially for a large-cap stock. The table below lists each of the stocks that have rallied 50%, and if there's one theme that immediately stands out, it's that Technology has been driving the surge. Eight of the 19 stocks listed are from the Technology sector, including three of the top four. The best-performing stock off the April low has been Seagate Technology (STX), which has nearly doubled. After Technology, the next most heavily represented sectors are Industrials and Utilities (yes, Utilities!) with three each.



Of the 56 stocks that are lower since April 8th, only 14 have declined by double-digit percentages. Leading the way to the downside, UnitedHealth (UNH) has plunged over 45%. Along with UNH, Humana (HUM) is down close to 20% and just two others are down over 15%. While Technology has been popular on the leader board, Health Care accounts for more than half (8) of the 14 biggest losers. Looking through the names listed, they're primarily defensive, so you wouldn't expect them to outperform during a period like the last two months, but double-digit declines? Someone get these stocks a doctor!

 

S&P Giants and Record Highs
Fri, Jun 6, 2025

Within the S&P 500, 32 stocks now have market caps of at least $250 billion. Of those, four have traded at all-time highs today. Microsoft (MSFT) is the largest of these with a market cap of roughly $3.5 trillion. As for the rest of the Magnificent Seven members, there's a variety of where they are trading relative to their respective all-time highs, with ones like NVIDIA (NVDA) within 5%, whereas Tesla (TSLA) and Apple (AAPL) are down over 20%. The two major payment processors, Visa (V) and Mastercard (MA), are the next two largest stocks at record highs, followed by Big Blue: IBM (IBM). While not closing out the week at a record, there's another four stocks that hit record highs this week, including Netflix (NFLX), Philip Morris (PM), Broadcom (AVG), and Palantir (PLTR).

While there are plenty of names with recent highs, three stocks trace their records to much longer ago. Bank of America (BAC) last traded at record highs way back in November 2006, and General Electric (GE) and Cisco (CSCO) have all-time highs from around 25 years ago. These three stocks are currently down double-digit percentages from those highs, but some are seeing interesting developments.



Below, we show the three aforementioned stocks with all-time highs dating back the furthest. General Electric (GE) and Cisco (CSCO) are both on the verge of long-term breakouts after moving above long term resistance in recent months. Those rallies mean the next resistance levels to watch are their early 2000s highs. As for BAC, price has come off the worst levels, but the highs from 2022 and this past spring would act as more tangible resistance before the 2006 all-time high comes into the picture.

 

May Payrolls Were OK, but There’s Weakness Under the Hood


On the face of it, the May payroll report was ok. The economy created 139,000 jobs in May (above expectations for a 126,000 increase) and the unemployment rate was unchanged at 4.2%. But pop the hood and there’s cause for concern.

For one thing, we got a net 95,000 downward revision of jobs created in March and April:

• March was revised down by 65,000, from 185,000 to 120,000. Remarkably, this was first reported as a 228,000.
• April was revised down by 30,000 from 177,000 to 147,000.

This brings the 3-month average to 135,000. That’s well below the 209,000 average we saw back in December, and even below the 2019 pace of 166,000.

Here’s the other thing — the payroll data is based on surveys of over 120,000 businesses representing over 630,000 worksites. These are much larger than any private surveys but there’s still noise associated with it (which is why we get large revisions). The “statistical significance at the 90 percent confidence level” is 136,000. What does that mean? If you’re well above this number, you can be fairly sure job growth is positive. If you’re at this number, like right now (and also seeing downward momentum), we can’t be sure the economy is actually creating any net jobs. Not a certainty, but it’s an uncomfortable place.

Now, immigration has more or less completely collapsed, and so the economy probably needs about 100,000 jobs (if not less) to keep up with population growth, since it’s growing more slowly. And if it does this, as seems to be the case if you take the 3-month average at face value (and assume no more downward revisions), the unemployment rate shouldn’t increase.

The unemployment rate actually comes from a survey of about 60,000 eligible households, and it is much noisier than the payroll survey. That’s why it’s more useful to look at ratios like the unemployment rate or employment-population ratios with this survey. The May household survey showed that employment fell by almost 700,000, but the confidence interval here is 600,000 (like I said, it’s noisy). At the same time, the denominator for the unemployment rate, i.e. the labor force, also fell by 625,000. That’s why the unemployment rate remained unchanged at 4.2%. A labor force that is shrinking is not great for the economy, but it will hide weakness when calculating the unemployment rate.

Meanwhile, the prime-age (25-54) employment population ratio pulled back from 80.7% to 80.5%. By itself, that’s still pretty good and higher than anything we saw from 2001-2019, but the question is whether it sticks around here. I like to look at this metric because it helps offset demographic issues (due to an aging population) and issues around how “unemployment” is defined.



Distribution of Job Growth Isn’t Great
The composition of job growth across sectors also gave less cause for comfort. Close to 63% of jobs created in May were in the non-cyclical sectors of health care and social assistance and private education (+87,000). Employment in cyclical areas like professional and business services, information (including technology jobs), and manufacturing fell by 24,000. The one positive is that leisure and hospitality jobs rose by 48,000 — these aren’t high-paying jobs but it tells you that service sector activity like restaurant spending and travel remain healthy.

The composition of job growth in May follows a theme we’ve seen over the past year, and especially year to date. Over the first 5 months of this year, the economy has created 619,000 jobs (averaging 124,000 per month). Of that…

• Health care, social assistance, and private education: 379,00 (61%)
• Government: 33,000 (5%)
• Leisure and hospitality: 74,000 (12%)

That’s really skewed, and not exactly what you would see if the economy was firing on all cylinders. The big picture is that cyclical areas of the economy are weak, buffeted by both tariffs / tariff uncertainty, and high interest rates.



Tariff Uncertainty + Fed Pause = More Slowing
We still have no idea what the end game is with a big piece of the announced tariffs. They’re simply on pause now. The average effective tariff rate in the US was about 2% at the start of the year. It’s certainly going to much higher than that. It’s currently around 15%, but it’s an open question whether stays here, or moves closer to 10%, or moves even higher than 20%.



Ultimately, American business will figure out how to live with these tariffs. Either they take the hit to their margins or pass price increases to consumers. But the ongoing uncertainty, and possibility of inflation flaring up again, is likely to keep the Fed on the sidelines for longer.

Moreover, with the headline data (like the unemployment rate) suggesting the labor market is ok, the Fed may believe it has time to wait for more data. The market’s currently expecting about two more 0.25%-point cuts from the Fed this year, but we may not even see one if the unemployment rate doesn’t move much higher than 4.5% (and given the falloff in immigration, it may not).

So what looks like labor market resiliency on the surface may hide weakness underneath. In my last blog, I discussed how a broad range of economic indicators, as captured in our proprietary economic index for the US, indicates that economic momentum is sliding. Also keep in mind that pausing on rate cuts is not a benign status quo — policy is implicitly getting tighter because wage growth is easing. Historically, the fed funds rate rising well above the pace of wages, i.e. increasingly tight monetary policy, has constricted the economy and ultimately these situations ended up in recessions.





Trouble in Housing
In short, policy is tight right now and it’s going to remain tight until the Fed sees more data. And that’s going to drag even more on cyclical areas of the economy, notably housing. We have a big problem in housing and some of that is because of what happened soon after Covid.

Most homeowners were able to buy or refinance at mortgage rates close to 3% in 2020 – 2021, and that meant more money in household pockets. But once rates surged in 2022, new homebuyers were locked out of the market as affordability collapsed. In addition to high mortgage rates, inventory was low and so prices moved higher. Existing homeowners were reluctant to put their house on the market because that would involve switching from an ultra-low mortgage rate to something well above 6%. Higher home prices is good for homeowners unless you want to move to another home (because that home is also more expensive) with a higher mortgage rate. Of course, this can go on for only so long. If you have to move, you have to move and this year we’re starting to see supply increasing , i.e. inventory is normalizing as more homes are put on the market. But that also means prices are easing in several cities across the country, notably in the South.

Even as supply is increasing, elevated mortgage rates close to 7% are creating a demand side problem as well. Mortgage applications are up 17% since last year, but they’re still a whopping 40% below average 2019 levels. Refinancings are down 65% from average 2019 levels. Remember, this a key mechanism by which homeowners can access home equity (which they have more of), but the door is shut because of elevated rates.



The tariff mess in April led some forecasters to predict an economic crash, as early as this summer. We were not in that camp, but that doesn’t mean we’re out of the woods. The whole tariff situation and ensuing uncertainty, along with headline labor market data hiding underlying weakness, simply increases the risk of tight monetary policy, and elevated interest rates becoming a larger and larger drag on the economy. That’s a slow burn, but a burn nonetheless with risks increasing as we get closer to year end and in early 2026.

 

Want some good news?

 

IPO Momentum Continues


Strong recent activity and returns in the IPO market continue to provide a gauge that investor sentiment is high. As I wrote previously, IPO activity across major U.S. exchanges has largely rebounded to long-term average levels. Post-IPO returns reveal a meaningful divergence between technology and non-technology companies, mirroring the recent bull market in tech-related stocks. A deeper dive into a recent technology IPO may help illustrate why.

Recent technology-related IPOs have outperformed their non-technology counterparts. Since the beginning of 2024, there have been 23 ‘large IPOs’ – defined as deals raising more than $500 million in proceeds – with 11 coming from tech-related companies and 12 from non-tech sectors. On average, tech IPOs have seen a share price appreciation of 108% compared to their deal price. In contrast, the average non-tech IPO has ‘only’ appreciated by 49% relative to their deal price, as shown in the chart below.



The chart also shows a more favorable distribution of outcomes for tech IPOs. Technology’s best performing IPO, CoreWeave, has returned 237% compared to its deal price, whereas Amer Sports’ 188% return since its deal is the best performer in the non-tech cohort (price return data from FactSet as of 6/5/2025 closing prices).

A closer look at CoreWeave highlights why some technology IPOs have delivered such strong performance. CoreWeave exhibits several distinguishing characteristics compared to its peers. Public market investors appear willing to pay premium valuations for businesses they perceive as uniquely positioned to sustain long-term competitive advantages.

CoreWeave’s specialized cloud computing architecture has become a key enabler for emerging AI applications. According to company reports, OpenAI is one of CoreWeave’s largest customers, selecting the company to help them train and host their latest AI models. CoreWeave also earned the #1 ranking in SemiAnalysis’ March 2025 GPU Cloud ClusterMAX™ Rating – a third party scoring system evaluating cloud providers on factors such as security, reliability, and usability, among other factors. CoreWeave’s rating even exceeded those of major incumbents like Microsoft Azure and Amazon AWS.

This recognition may help explain CoreWeave’s ambitious growth outlook. Analysts polled by FactSet estimate CoreWeave can grow revenue to $16.4 billion in 2027, up from 2024’s $1.9 billion (data as of 6/6/2025). If the company can achieve this estimate, it would represent a 105% compounded annual growth rate, a growth rate that is significantly above many other technology companies. Outsized growth of this nature may help investors point to unique operating abilities. With hardware and software engineered to work in tandem, CoreWeave may be able to maintain a performance edge over its peers and continue fueling its outsized expansion.

The IPO market has largely recovered and underscores the market’s appetite for innovation-driven growth stories. Companies like CoreWeave have captured investor enthusiasm by offering not just scale, but also differentiated capabilities in fast-growing sectors like AI infrastructure. Investors should remain selective, distinguishing between companies with durable value propositions and those benefiting from short-term hype. The IPO market’s recent rebound may be just the beginning of a longer-term rotation toward next-generation technology platforms.

 

$1,000 in the Stock Market at Birth
Mon, Jun 9, 2025

There's a real chance that newborn children in the US will begin receiving $1,000 in an investment account at birth if President Trump's budget bill passes Congress in the months ahead. CEOs of some major public companies are actually meeting at the White House today to discuss the "$1,000 at birth" provision.

Below is a chart we created showing how much $1,000 at birth would be worth today if it were invested in the S&P 500 at the end of each month going back 50 years (with dividends re-invested).



As shown above, $1,000 invested in the S&P fifty years ago and not touched would be worth nearly $350,000 today. That number drops to roughly $127,000 if the $1,000 were invested at the end of November 1980 and $40,000 if the start date is August 1987. Even still, there are a lot of 37-year olds out there born just before the 1987 crash that wouldn't mind having $40k in an investment account right now!

The second chart above shows the same data over just the last 25 years for better scale. Because of the Dot Com bubble and burst of the late 1990s and early 2000s and the Financial Crisis of the late 2000s, people born in various months during this period would have quite different account values right now. $1,000 invested in August 2000 just after the Dot Com peak would be worth roughly $6,200 today, while $1,000 invested nearly ten years later in February 2009 would be worth nearly $5k more at $11,000. If this provision comes to pass, we may see birth rates go up during lengthy bear markets!

 

CPI on Tap
Tue, Jun 10, 2025

Tomorrow's report on May CPI will help to shape the inflation narrative for the rest of the summer. A stronger-than-expected report will be quickly seized upon by the anti-tariff contingency, and if there's a weaker-than-expected report, you can bet that President Trump will be on Truth Social singing the praises of tariffs. Earlier today, we tweeted that the Fed's CPI Nowcast was predicting headline CPI to rise 0.13% compared to a Wall Street consensus forecast of 0.2%, so if the Nowcast is right, get ready for some Truth Social posts!

Besides the Nowcast, seasonal trends suggest that a stronger-than-expected inflation print is less likely. The table and chart below show the frequency of stronger-than-expected, weaker-than-expected, and inline headline CPI prints from 1999 through 2024. Since 1999, the May CPI report (released in June) has only been stronger than expected 31% of the time. That ranks as the fifth-highest percentage of higher-than-expected readings of any month. Weaker-than-expected reports, however, are more common at 46% of the time. The only other month with a higher frequency of lower-than-expected headline CPI reports is November (released in December) at 50%.

 

Small Caps Rocking Typical Post-Election June

In post-election years since 1950, early June strength has been notably stronger for NASDAQ and Russell 2000 while DJIA and S&P 500 have typically struggled. 2025 June gains so far of 3.8% for Russell 2000 ($IWM) and 2.5% for NASDAQ ($QQQ) sets up a typical brisk, mid-month drop followed by a month-end rally led by technology and small caps.

 

The Rocky Balboa Market


“You, me, or nobody is gonna hit as hard as life, but it ain’t about how hard you can hit. It’s about how hard you can get hit and keep moving forward. How much you can take and keep moving forward. That’s how winning is done!” Rocky Balboa in Rocky Balboa (aka Rocky VI from 2006)

First things first, I’m a huge Rocky IV fan, I just wanted to get that out right away. We all have a favorite Rocky movie, but him taking down Captain Ivan Drago had to have been a top highlight from my youth.

What does Rocky have to do with this market rally you ask? Well, much like when Rocky took a hard hit and sometimes got knocked down, he’d always get back up (except in his first fight with Clubber Lang in Rocky III, but he won the climactic rematch). This is quite similar with how the market has been acting lately. A perfect example is last Thursday. The S&P 500 fell over worries about President Trump and Elon Musk’s bromance deteriorating in real time for all of us to see. Then a funny thing happened—the next day the index soared right back and then some, closing above 6,000 for the first since February 21. Incredibly, the S&P is only about two percent away from a new all-time high, something that even the staunchest of bulls wasn’t expecting this time two months ago.

Rocky might have lost at the end of Rocky I against the great Apollo Greed, but he came back bigger and better and won in Rocky II. In a lot of ways, this 2025 market is Rocky II, as a down day has seen the S&P 500 up an average of 0.29% this year, which would rank as one of the best years ever for average performance after a down day. Since 1980, only 2020 would be better than 2025 so far. Other years that saw big returns after down days were 2003, 2008, 2009, 2020, and of course now. Yes, 2008 was a horrible year for stocks, but those other three years were all solid after hiccups in the first quarter. Come to think of it, 2008 is a lot like Tommy Gunn in Rocky V, something no one has very positive memories of after all these years. The bottom line is this resilient market is yet another reason we expect to potentially see this bull market continue with a solid second half of the year.



Just like the amazing Rocky spin off Creed (and Creed II and III) starring Michael B. Jordan, sometimes it is good to diversify your storylines, just like it is to diversify your equity holdings. Although US returns have been fairly muted this year after the back-to-back 20% gains the previous two years, what might surprise many US investors is that most global stock markets are up nicely, with many making new 52-week or all-time highs. This is why having a globally diversified portfolio can benefit US-centric investors, as the US won’t always lead. The good news is we do anticipate the US may play catch up the rest of 2025, but big picture, this is a global bull market and investors are being rewarded for being in risk assets.



Thanks for reading and I’ll leave you with this hilarious back-and-forth between Rocky and his beloved trainer Mickey.

 

Benign May CPI Reading Unlikely to Spur June Fed Rate Cut

Although today’s Consumer Inflation Index (CPI) report came in below consensus estimates, a Fed rate cut later this month still remains highly unlikely. Headline CPI increased 0.1% from April to May pushing year-over-year inflation to 2.4%, up from 2.3% in April. Although there was a tick higher in year-over-year inflation the overall trend in CPI back towards 2% (and possibly less) appears to still be on track for interest rate cuts in the second half of 2025.

 

Sentiment Around New Highs
Thu, Jun 12, 2025

In Tuesday's Closer, we provided an update on monthly sentiment gauges, noting broad improvements since the April low. Of those inputs that have perked up is the weekly AAII survey. This week's release saw the percentage of respondents reporting as bullish rise once again, to a two-week high of 36.7%.



The other side of the equation—the percentage of respondents reporting as bearish—had a more notable move this week. Only 33.6% of respondents were bears, which was the lowest reading since the week of January 23.



Put together, the bull-bear spread came in at 3.1, or alternatively, bulls outnumber bears by 3.1 percentage points. There was another positive reading in the spread a couple weeks ago, but this is the highest spread since the last week of January when it was at 7. In all, this indicates that investors have begun to shift more bullish rather than the consistent bearish tones from the past few months.



Also worth noting is that investors' sentiment has made this improvement in tandem with a push in stock prices back near record highs. As the S&P 500 is about 1.5% below its February 19 peak, the current level of sentiment is actually lower than what might be expected. Historically, AAII sentiment (measured by the bull-bear spread) has averaged more bullish readings when the S&P is closer to a record, and readings become more bearish as it falls further from the highs (save for extreme drawdowns where sentiment actually begins to pivot to be more bullish). For the present distance from a high, the bull-bear spread has historically averaged in the high single digits compared to 3.1 today. In other words, sentiment does not appear to have gotten over its skis as the index attempts to break out.