In summary from J.P. Morgan's proprietary AI quant model latest:
- Corporate sentiment is weak overall given financial conditions, aggregate sentiment QSI score for the S&P 500 at the 32.7th percentile
- The QSI on Federal Reserve monetary policy is at a multi-year low at the 12.2 percentile, similar to levels last seen in 2008
- cost of capital QSI came down at the 5th percentile
- credit risk was at the 13th percentile
JPM make special note on taxation and buybacks:
- Sentiment on taxation is near lows at the 2.5th percentile, "in sharp contrast to very positive sentiment leading up to and passage of Tax Act in 2017."
- "This is important given lower effective tax rates and interest expense were steady tailwinds for margins for almost three decades,"
- Over the past 12 months corporate sentiment for taxation and buybacks "has reversed sharply and is at multi-year lows."
- Sentiment on buybacks "continues to fade and likely remains challenge ... given already rich valuation, less incentive for debt funded share repurchases, high interest on balance sheet cash and new buyback tax."
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The JPM Quant Sentiment Indicators are based on a proprietary artificial intelligence/natural language processing engine "that objectively measures management sentiment for key macro drivers based on public company filings and transcripts for S&P 500 companies."
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S&P500 doesn't seem too fussed by all the sadness?
