The U.S. equities market is in healthy shape.
While some pundits and recent conference attendees might continue to lament that the equities market is suffering from a lack of investor confidence, analysts at Credit Suisse reported that many measures used to gauge the sector’s health are positive.
In the bulge firm’s April U.S. Chartbook report, “Markets Spring Ahead,” analysts noted several key factors that pointed to the stock market’s health.
First, they noted the equities market indexes, such as the Dow Jones Industrial Average and S&P 500 are trading at all-time highs. The DJIA Tuesday broke through the 15,000 level and the S&P 500 topped 1620. According to Credit Suisse, stocks provided a 12-percent return to investors for the first four months of this year, the sixth best level since 1980.
“All measures related to microstructure that we looked at are positive, yet we still hear about a lack of investor confidence,” said Ana Avramovic, analyst at Credit Suisse. “The S&P is setting all-time highs, which is kind of surprising given that the economic data still doesn’t seem great.”
The firm also noted investors are pouring money into mutual funds again, and flows to exchange-traded funds are positive. The broker noted about $2 billion flowed into U.S. equity mutual funds in April, while ETF volume was up approximately $7 billion for the month.
Finally, average daily volume has climbed to more than 6 billion shares, up from last fall. And volatility, as measured by the Chicago Board Options Exchange’s VIX, is hovering around 11, its lowest level in about six years. The market is generally considered volatile when the VIX reaches a measure of 25.
