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Greed has entered the chat
The CNN Money Fear & Greed Index climbed to 56.5, up from 49.1, which is basically the market’s way of taking a deep breath and deciding panic is so last week. At the same time, the S&P 500 and Nasdaq both hit fresh all-time highs, so yes, the bull case is still very much alive.
Why the mood swing?
A few things helped grease the wheels:
- President Trump said the conflict was “very close to over,” which gave investors a little extra optimism about oil and risk assets.
- U.S. import prices rose 0.8% in March and export prices climbed 1.6%, adding another layer to the inflation-and-growth puzzle.
- The NY Empire State Manufacturing Index jumped to 11 in April, a five-month high and better than expected, which is one of those macro datapoints that makes traders sit up straighter.
The earnings backdrop is doing some lifting
Bank earnings also helped keep the mood buoyant. Morgan Stanley and Bank of America both posted better-than-expected first-quarter results, which is not exactly a bad thing when financials are supposed to be the grown-ups in the room.
Meanwhile, investors are waiting on PepsiCo, Netflix, and Abbott to report, so the market isn’t exactly done with its caffeine. If those names deliver, the greed trade could get another leg up. If they stumble, well, sentiment can turn on a dime.
Big picture: when the market drifts into “Greed,” it often means investors are comfortable paying up for risk. That can be great for momentum — until everyone remembers gravity still exists.