Hey, Ross here:
In case you were wondering where this newsletter went yesterday, stock markets were closed for Juneteenth, so this was on a short break as well.
The Fed held rates steady on Wednesday, as widely expected, continuing their “wait and see” stance.
What was most surprising is that markets actually closed flat, instead of dipping like they normally do when Powell speaks.
Now I’ve been talking a lot about market sentiment lately.
For the final trading day of the week, let’s look at a chart that shows why sentiment can be so fickle.
Chart of the Day
As described, this chart shows the percentage of Democrats and Republicans who expect stocks to go up in the next six months.
In other words, it’s the percentage of Democrats who are bullish compared to Republicans who are bullish.
As you can see, bullish sentiment is clearly divided along partisan lines.
When Biden was in office, Democrats were far more bullish on average.
Now that Trump is in office, the tables have flipped, with Republicans largely bullish and most Democrats in full-on panic (just over 10% are bullish, really?).
Look, this isn’t a political post.
Sure, I’m no fan of Biden – but I also criticized Trump for his haphazard “Liberation Day” tariff announcements.
But the point I’m trying to make is this…
Sentiment has much less to do with objective market data than most think.
And here’s something to think about…
How are these overly-bearish Democrats skewing the data?
I elaborate below.
Insight of the Day
If Democrats are overly bearish on the market, then we know that there is a sentiment gap we can exploit.
Just over 10% of Democrats are bullish, according to WSJ.
Given the price action we’re seeing right now – there is simply no way that’s anywhere close to being objective.
This is likely a big driver behind the overly bearish broad sentiment data we’ve been seeing for the past few months…
It’s the investing version of Trump Derangement Syndrome – and it’s skewing the data.
And when the data is skewed to such a degree…
That means having superior information is an even more powerful edge.
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And I’ll see you in just a bit at 11 a.m. ET sharp.
Customer Story of the Day
“Ross is always current, on top of market trends and why they move. It’s because of the “why” that I am an Alpha and Fire Trader ‘s member.
Well worth the investment! You will be glad you joined!”
Ross Givens
Editor, Stock Surge Daily
