Is there a turning point in market sentiment? US stock executives are accelerating their bottom-fishing, with the buy-sell ratio approaching the highest level since the end of 2023
As investors massively withdraw from U.S. stocks, over 180 company executives have increased their holdings in their own stocks in the first two weeks of this month, with the buy-sell ratio rising to its highest point since the end of 2023. Analysts say that whether the trend of executives increasing their holdings can continue is crucial, but executives buying more shares does not mean the market has bottomed out; they are also crossing the river by feeling the stones
As investors flee the U.S. stock market, some executives are quietly increasing their holdings.
Data from Washington Service shows that in the first two weeks of this month, no fewer than 180 company executives have stepped up to buy shares of their own companies, with a buy-sell ratio rising to 0.40, close to the highest level since the end of 2023. The higher this ratio, the more buyers there are compared to sellers, indicating greater confidence.
Matt Lloyd, Chief Investment Strategist at Advisors Asset Management, stated that this is a positive signal. Currently, investor sentiment towards the market is particularly poor, and whether the trend of executives buying stocks can continue is crucial as the stock market attempts to stabilize.
When Everyone is Pessimistic, They are Buying
On the surface, the current market is filled with despair.
Public confidence in the economic outlook has fallen to its lowest point in nearly 30 years. According to the latest global fund manager survey by Bank of America, 82% of Wall Street professional investors expect the global economy to weaken further, and nearly record numbers of respondents indicated they would reduce their allocation to U.S. stocks. Interestingly, this survey is referred to as a "contrarian indicator" because they are wrong every time they predict; the same respondents were record bullish in February, and the market subsequently crashed.
All sentiment indicators are flashing red, and the market seems poised for a collapse at any moment. Meanwhile, corporate executives are going against the tide, making substantial purchases of their own company's stock. Media reports indicate that while the reasons for executives buying stock are often varied, the increase in purchase volume suggests they have confidence in the company's prospects, as they know the most and are closest to the truth.
This does not mean that the public can blindly rush into the market. Cautious voices remind us not to assume the market is safe just because executives are buying stocks. Adam Phillips, Chief Investment Officer at EP Wealth, stated:
"Like other companies, these companies are also feeling their way across the river, waiting for clarity on trade policies."
On the other hand, the market remains cautious. Many investors are still worried about rising inflation due to global trade conflicts and the possibility of an economic recession, especially some Democratic supporters who, in a survey by the University of Michigan, believe the U.S. economy may fall into recession