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To the second Monday in June, the S&P 500 had posted its worst start to a calendar year since 1940, a decline which caused both equity fundamentals and investor sentiment to undergo significant resets, says a Dixon Mitchell summer research report. Net bullishness is now lower than it was at the pandemic trough and just barely above where it sat during the worst of the great financial crisis of 2008/09. Stock valuations have compressed in recent weeks, a move which is also on par with the cuts experienced around past bear market bottoms. Though neither of these indicators will be enough to lift markets on their own, they can be important building blocks as equities begin to establish a base. When investor mood is at its worst, it’s often also the case that selling has been largely exhausted. At the same time, lower valuations make the math of equity ownership more compelling and tend to bring bargain hunters and fresh capital to the market, it says. So, despite the uncertainty that remains for stocks, indicators such as these are beginning to show signs that the worst may be behind us.