As equity markets rose, institutional brokers became optimistic about stocks as compared to the week before, according to data compiled by the Trade Ideas Monitor (the TIM), which is used by more than 4,300 equity sales people at institutional brokerage firms to send trade ideas to their clients. Trade ideas entered into the TIM reflect what brokers believe will happen to a stock over the next 1-3 weeks, on average.
Through the five trading days ended March 6, the FTSE and S&P indexes increased 5.2% and 10.0%, respectively. At the same time, new long trade ideas, as a percentage of all ideas brokers sent to investment managers in real time through the TIM, increased to 67% from 58% on March 5. March to date it is 65% and year to date is 57%.
The TIM Long Short Index increased 47%, to 2.03 from 1.38 on March 5, a positive sign. 2.03 is the fifth highest daily TIM Long Short Index for the year. The index measures the total number of long ideas compared to the total number of short ideas brokers sent to clients. The higher the index, the more bullish the brokers. At 1.5, brokers are entering two longs for every short. At 0.5, two shorts for every long. Month to date for March 2009, the index is 1.97 and year to date is 1.44.
Highlights: US/North America
Most Long Sectors: Airlines, Health Care Equipment, Aerospace & DefenseMost Long Stocks: JetBlue Airways, Covidien, General DynamicsMost Short Sectors: Apparel, Accessories & Luxury Goods, Industrial Conglomerates, Life & Health InsuranceMost Short Stocks: Tiffany, General Electric, Hartford
Highlights: UK/Europe/Asia
Most Long Sectors: Automobiles, Diversified Metals & Mining, Aerospace & DefenseMost Long Stocks: BMW Motor Company, Xstrata, Qinetiq GroupMost Short Sectors: Brewers, Diversified Banks, Fertilizers & Agricultural ChemicalsMost Short Stocks: Anheuser-Busch InBev, Lloyds Banking Group, K+S
D.C.