Wall Street strategists are almost universally bullish on stocks as the S&P 500 index stands within 3 percent of its record high, but hedge funds have a different idea in mind.
All 22 bank and money-management-firm strategists surveyed by research firm Birinyi Associates expect the S&P 500 to post a gain this year — 8.2 percent on average.
But about 25 percent of hedge-fund managers expect an unchanged or negative reading, according to a survey of almost 200 managers by investment adviser Aksia, The Wall Street Journal reports.
"I don’t think the mood of the market’s insiders is near as good as the glowing, trumpeting displays of confidence from strategists,"
Jim Vos, Aksia’s CEO, told the paper.
The use of borrowed money by hedge funds, a sign of their bullishness, fell last week to the lowest level in more than two years, according to a Morgan Stanley client memorandum obtained by The Journal.
David Kostin, chief U.S. equity strategist at Goldman Sachs, represents one stock strategist who is bearish — for the short term anyway.
"The U.S. equity markets are likely to experience a pullback some time in the next four to six weeks, and that would be pretty consistent with the magnitude of an extreme reading we see in the Commodities Futures Trading Commission data" of long positions,
he told CNBC.
To be sure, Goldman is maintaining its year-end target of 2,100 for the S&P 500 index. That would constitute a gain of 2 percent from last year's close and 3.5 percent from Monday's close of 2,028.
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