Are they wrong? Flush with cash, retail investors from New York to Shanghai aren’t going away. Barclays reviews the numbers.
Everything is done. Gold is down. Bitcoin is down. Stocks were largely down last week. The Covid Trade stocks — restaurants like Cheesecake Factor and amusement parks like Six Flags — were down. After quite the run for those stocks, word on the Street is that investors are putting money into cash and Treasury bond funds, building their “blood in the streets” war chest just in case things fall a bit more into the spring. Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with the “blood in the streets” saying that is so popular among investors. He said, “Buy when there’s blood in the streets, even if the blood is your own.” I think another version, you buy at the sound of cannon fire. For what it’s worth, a Boston Consulting Group survey of investors predicted a 500 point drop in the S&P 500 at some point in early spring, before recovering to over 4,000 points over the next three years. But before we get too bearish, here is what we can hang our hats on: In the Money USA Personal income rose 10% in January thanks to stimulus checks, Payroll Protection and other programs designed to offset the economic pains of lockdowns. The savings rate rose to 20.5%, while compensation rose a modest 0.7% monthly and government social benefits rose 53% over December levels due to year-end stimulus check. Some of this money is clearly finding its way into the stock market with retail investors now the infamous little darlings of CNBC.
