sentix Global Investor Survey

Commentary of the latest results

33 / 2023

Free of charge for active sentix participants /terms of subscription at www.sentix.co.uk

Patrick Hussy
Managing Director, CEFA

patrick.hussy@sentix.de sentix GmbH

Mainzer Straße 4b, D-65550 Limburg / Lahn
Tel. +49 (6431) 59786-04, info@sentix.de

sentix Sentiment Highlights

•
•
Equities: In the middle of the process, not at the end
Equities: No reassessment
Since 2001.
• Equities: Problematic situation in China
• sentix styles - Investor preferences & behavior Feel the markets
Current signals from the sentix data universe

EUR-USD

Crude oil
EUR/JPY
S&P 500

T-Bonds

Bitcoins
Nasdaq

CSI 300
Nikkei

Bunds
ESX50

Silver
Gold
DAX

SMI

Sentiment

Strategic Bias

Time Differential Index

Overconfidence Index

Neutrality Index
Background information on the displayed arrows see page 7

Chart of the week

Sentiment for equities is plummeting
dramatically. The sentiment level
brings back memories of September
2022. The sentiment signal at that time
marked the beginning of a major
upward movement. Is the current
situation comparable and is there a
similarly resilient sentiment buy signal
today? It is worth paying attention to
similarities and differences. A worrying
development is emerging for the
Chinese stock market.

sentix Sentiment Euro area equities and Euro STOXX 50

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 sentix Global Investor Survey
Commentary of the latest results
33 / 2023

sentix Sentiment Highlights – Equities, Bonds, FX & Commodities

US equities (1)
Sentiment for U.S. equities reaches its
lowest level since Sept. 22, 2023 (inverted
in the chart in orange). This makes the
contrarian investor sit up and take notice.
It is striking that the high pessimism in the
sentix indicators is far from being reflected
in the AAII survey. The bear rate there
reacts only slowly and remains far away
from the extreme values (green line). A
simultaneous indication of extreme values
would speak for a market shakeout. The
sentix signal must therefore be closely
examined.

US equities (2)
The strategic bias for US equities remains
"stable". The investment professionals are
even taking it up a notch. The current
setback is not perceived as a game
changer. A rising medium-term value
perception is basically a positive factor for
stocks. However, the chart also shows that
investor behavior is by no means
comparable with the situation in 09/2022.
The bias has risen by a good 25 percentage
points since May 2023, in parallel with the
rising (!) prices. This smells more like
capitulation to the bull market and less like
classic "value perception".

Euro area equities (1)

If the balance of bias and sentiment is
calculated, the time differential index
reflects the balance of power between the
two forecast periods. For the Euro Stoxx
50, the TD index reaches a value of -53
percentage points. With such strongly
negative values, the statistics turn out to
be positive for earnings expectations: In 7
comparable cases, the stock market was
about 6% higher after 12 weeks. But the
statistics also show that the next 1-4
weeks can be quite challenging.

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 sentix Global Investor Survey
Commentary of the latest results
33 / 2023

Euro area equities (2)

If we look at the positioning behavior of
private and institutional investors (chart:
position risk levels), we see a striking
difference compared with the low in
sentiment in September 2022: The
investment quotas are currently
significantly higher. Institutional investors
in particular are refusing to reduce equity
positions to any great extent (red line).
This signals that the sentiment barometer
does not reflect true fear, but that
investors are only expecting a small
summer storm. Panic looks different.

Euro area equities (3)

Another conspicuous feature is the
detailed analysis of sentiment in isolation
according to both investor camps (see
Sentiment Spread chart). Currently, there
is no difference in sentiment toward the
Euroland stock market. The situation is
usually different at significant market
lows: Private investors are much more
anxious than the analysts. This also raises
doubts as to whether we currently have a
robust buy signal.

Euro area equities (4)

"Vola ante portas" has been our credo in
recent weeks. Now the power of high
neutrality is showing: the high investor
irritation is discharging and setting the
herd in motion. The extent so far shows:
The ongoing movement is by no means
complete. Rather, we are in the middle of
the adjustment process.
Side note: It is also striking that the current
setback has so far only triggered a modest
media echo. Considering the explosive
situation in chart terms and a sentiment
that superficially signals "panic", this is a
thoroughly questionable reaction.

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 sentix Global Investor Survey
Commentary of the latest results
33 / 2023

Risk radar
The risk radar also shows only "moderate"
opportunities for equities. This was
completely different at the market low in
September 2022. The stock market is by no
means oversold, and the rubber band is
hardly stretched in this partial view. The
market breadth is also just beginning to
develop weakness and does not indicate
an extreme oversold situation. Moreover,
there are no indications of an
overconfidence situation so far. The
bearish sentiment currently provides only
moderate (tactical) opportunities.

Chinese equities
A shock moment can be observed on the
stock market in China. Sentiment has
rattled off 51 percent in just three weeks,
and the bias has plummeted by 30
percentage points in just two weeks.
Investors may have discovered the next
breaking point and are only beginning to
transfer this to the domestic markets. The
development holds explosives, the
statistics show further significant price
losses in such cases.

Goldn (in USD)

The situation for gold and silver is
improving again. The time difference index
is very far "down" there. Especially for
silver, there was a clear cleanup in the
positioning behavior in the last 3 weeks
(without figure, CoT data). The bias
continues to hold in strong positive
territory. Both assets should be rather
joyful in the coming weeks and be able to
stabilize the overall portfolio.

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sentix Styles – Investor preferences & behavior
Asset Class Sentiment
Corporate Bonds
A small widening in spreads
is enough to push sentiment
for credits to the zero line.
Corporate bonds are
currently far removed from
the stress environment of
September 2022, when
spreads and sentiment were
at significantly different
levels.
Asset Class Sentiment
Real Estate
The poor mood in real estate
has been dampened. As
recently as last month, it
looked as if the asset class
might calm down and
bottom out. However, the
pressure remains high.
Asset Class Sentiment
IPOs
In the IPO market, the tender
plant of hope is also being
crushed again. With the
weaker prices for
established shares, interest
in new share issues is also
waning.
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sentix Global Investor Survey
Commentary of the latest results
33 / 2023
Background
Pro corporate bonds The sentix Asset Class Sentiment on
Corporate Bonds (Credit Sentiment)
is part of the sentix Styles Indicators
and represents investor preferences
on spread bonds, for example
corporate bonds, versus AAA bonds
(Bunds).
These are medium-term
expectations that often run ahead
of market developments, as rising
preferences indicate a willingness to
Contra corporate buy (and vice versa).
bonds
Pro real estate Background
The sentix Real Estate Sentiment is
part of the sentix Styles Indicators
and represents investor preferences
for real estate in the investor's
home market.
These are medium-term
expectations that often run ahead
of market developments, as rising
preferences indicate a willingness to
buy (and vice versa).
Contra real estate
Background
Pro IPOs The sentix IPO Sentiment shows the
mood of investors towards the IPO
market.
A good sentiment indicates a good
placement ability of issuers and a
possible overpricing (i.e. too high
issue prices) and thus a worse
performance of new issues in the
future.
Contra IPOs
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 sentix Global Investor Survey
Commentary of the latest results
33 / 2023

Investor behaviour at a glance

Sentiment overview
The chart compares the sentiment for
different markets and asset classes as a
bar chart. The individual bars document
the range of the historically measured
sentiment values (mostly since 2001).
Strong optimism is coloured red due to the
associated risks. Conversely, low
sentiment values are marked green, as
such extremes of sentiment emphasise
opportunities. The current survey value
(black dot) and the previous week's value
(yellow diamond) are displayed. The 4-
week comparison enables a medium-term
classification.

Overconfidence overview
The chart gives an overview of which
markets are currently experiencing strong
overconfidence. The diagram shows the
most important markets and their
historical range of fluctuation in
overconfidence. The range of the index
measurement varies between -13 and +13
points. Particular attention should be paid
to extreme values from +/-7 points: From
this level onwards, the degree to which
market participants overestimate their
own capabilities rises to such an extent
that this gives rise to special market risks.
You can read off the current value (black
dot) with the comparative values from one
and four weeks ago.

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 sentix Global Investor Survey
Commentary of the latest results
33 / 2023

Background information on the sentix indices

sentix indicators are based on the sentix Global Investor Survey, a weekly survey among more than 5.000 international investors. The
survey is carried out on a regular basis since February 2001. For more information on sentix, the participation in the survey and on a
detailed description of all indicators, please visit our website under http://www.sentix.co.uk.

Evaluation of the indicators presented

The arrows indicate whether the indicator shown in the chart is a bullish or bearish indication for the respective market. The
classification is based on a statistical examination of the indicator in relation to future price developments! The statements on the
Neutrality Index refer to future volatility (fluctuation margin). The forecast horizon is 1 to 3 months.

indicates rising or falling prices indicates falling or rising volatility

sentix indicator Indicator description

sentix Sentiment The sentix Sentiment, investors one-month expectations for a given market, reflects the emotions
(short-term market expectations) – between greed and fear – of market participants. Negative sentiment extremes are usually a
straight indication for rising prices. High optimism may be a warning signal for an upcoming
market consolidation. A sentiment divergence mostly indicates more important turning points.

sentix Strategic Bias The sentix Strategic Bias, investors six-month expectations, reflects the strategic view of market
(medium-term market expectations) participants as well as their underlying convictions and perceptions of value for a given market.
As this indicator represents investors’ general willingness to buy or sell it should not be
interpreted as a contrarian signal. Rather it is usually leading the market by several weeks. And
as the indicator mainly reflects investors’ longer-term convictions and perceptions of value it is
an indicator coined by the “wisdom of crowds”, it bundles the knowledge floating around in a
market of various players.

sentix Neutrality-Index The sentix Neutrality Indices, represent the share of neutral investors in the market. A high
percentage of such investor’s points to irritation and greater volatility shortly. A low reading
shows that investors have understood “the market”. In the neutral camp, there is always an
important part of investors who are not or only marginally invested. Those are important as they
are potential future buyers or sellers! For sentix Neutrality Indices, the interpretation of the short-
term and the medium-term are most of the time similar. Consequently, the case is strengthened
when both time horizons reach extreme readings.

sentix Overconfidence-Index sentix Overconfidence Index measures the probability for the case that a series of rising or falling
prices has led to an augmented complacency among investors. Readings below -7 or beyond +7
are usually a sign that consolidations or corrections are imminent.

sentix Time Differential Index
For a given market, sentix Time Differential Index is calculated as the difference between the
short-term sentiment and the (medium-term) perception of value. High readings of the indicator
are a sign of a positive sentiment which is not supported by investors medium-term conviction,
which is a stress factor for the market. In turn, low readings result when there is fear on a short-
term basis but a reliable perception of value for the medium-term that is usually supportive for
the market.

A compendium in English can be found at https://www.sentix.de/index.php/en/category/indikatoren.html

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 sentix Global Investor Survey
Commentary of the latest results
33 / 2023

Disclaimer
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The investments discussed may fluctuate in price or value. Investors may get back less than they invested.

Changes in rates of exchange may have an adverse effect on the value of investments. Furthermore, past performance is not necessarily indicative of future results. In
particular, the risks associated with an investment in the financial, money market or investment instrument or security under discussion are not explained in their entirety.

We assume no liability for the information contained in this analysis. The analysis is no substitute for personal investment consultation. Even on the basis of the depicted
opportunities and risks, investors must individually assess – on the basis of their own personal investment strategies, their financial, legal and fiscal situation - whether
an investment in the financial instruments depicted here is sensible for them. As this document is in no way a direct investment recommendation, this document or parts
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