Investor Exposure To Risk Assets About To ‘Catching Down?’

06/02/2022

1 minute read

2022.06.02 08:26

Americans have very little confidence in the economy. In fact, you would have to go back to the banking collapse (2008-2009) to find as much pessimism as there is right now.

Investor Exposure To Risk Assets About To 'Catching Down?' Gallup’s Economic Confidence Index

Just how anxious are consumers? The spread between how we feel about the present (Present Situation Index) and our expectations for the future (Consumer Expectations Index) suggests the high likelihood of recession.

Investor Exposure To Risk Assets About To 'Catching Down?' Consumer Expectation Index Minus Present Situation Index

CEOs of prominent corporations are apprehensive as well.

Investor Exposure To Risk Assets About To 'Catching Down?' CEO Confidence Survey

More troubling? CEOs may already be acting on their trepidation.

Initial jobless claims turned higher in March and April. Additionally, job cuts are now on the rise (year-over-year %).

Investor Exposure To Risk Assets About To 'Catching Down?' Initial Jobless Claims

What do these trends imply for the stock market? .

Until now, investors have largely held firm to their exceedingly high allocation to stocks. History tells us that investors will reduce their exposure to stock risk such that their allocation “catches down” to the downbeat sentiment.

Investor Exposure To Risk Assets About To 'Catching Down?' Consumer Sentiment Index