LIVE MARKETS-Bearish sentiment deepens despite market highs: S&P Global investor survey

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BEARISH SENTIMENT DEEPENS DESPITE MARKET HIGHS: S&P GLOBAL INVESTOR SURVEY

A survey of U.S. equity investors conducted by S&P Global showed bearish expectations for the near term stood at record levels, painting a glum picture for what lies ahead in the face of a contrarian market that continues to climb.

The S&P Global Investment Manager Index survey's Equity Returns Index - which reflects the net balance of respondents expecting an improvement in U.S. stock performance over the coming 30 days - dropped to -49% in September from -35% in August.

September's reading indicates bearish views are more widespread than at any other time since S&P's survey data was first collected in October 2020.

"Worries are based on concerns that valuations are looking increasingly stretched given the current economic outlook and political environment," said Chris Williamson, chief business economist and executive director at S&P Global Market Intelligence.

Some 59% of respondents anticipate lower stock market returns in the coming month - a joint survey high - compared with 9% expecting the market to gain value - a new survey low. The remaining 32% see the market holding steady.

Classifying by fund types, bearish sentiment intensified among both mutual funds and non-mutual funds. Although the later are relatively more pessimistic, market expectations among mutual funds worsened to a joint-survey low.

Geographically speaking, anticipation of U.S. equity performance hit a survey low among North America-domiciled funds. Expectations among Rest of World investors were slightly less gloomy, though it still stood near the survey low.

Only April 2023 has seen a darker mood among Rest of World investors than what was recorded in September.

Meanwhile on Wednesday, the benchmark S&P 500 .SPX and the Nasdaq .IXIC hit another all-time high in early trading after a producer prices report kept the Federal Reserve on track to cut interest rates next week.

(Shashwat Chauhan)

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