China, Gold, Momentum Lead, But Surprisingly Savvy Investors Turn Bearish

2025-02-17 09:30:00 ET

Summary

• This week's price action was shaken up by higher-than-expected consumer inflation, better-than-expected tariff rhetoric, and weaker-than-expected retail sales data.
• It's not the data we see in the charts of economic conditions that matter most, but rather how the market reacts to it and what the expectations are for the future data of the chart.
• On Friday, the SPY, QQQ, and the equal-weighted Nasdaq Index ETF, QQEW, all hit an all-time high, but AAII investors are not celebrating. In fact, the trend in this sentiment survey has been getting more and more bearish for weeks.

By Geoff Bysshe

Momentum stocks are leading the market higher, but this is much different leadership than what elevated the market in 2024.

For example, the markets are at all-time highs, and “Risk-Off” sectors ( XLV , XLU , XLP ) are outperforming “Risk-On” sectors ( XLY , XLK , XLC ), and the “Cyclical” sectors ( XLI , XLB , XLE ) are outperforming both Risk-Off and Risk-On....

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