The absence of such worry can often lead to excessive speculation and market bubbles. There’s a saying on Wall Street that stocks climb a wall of worry, meaning that it’s a good sign if the market is going up even though there are legitimate concerns. Still, some market experts believe that the skepticism is healthy. Spencer Platt/Getty Imagesīond yields plummet as Covid anxiety grips markets again The New York Stock Exchange stands in lower Manhattan on in New York City. The persistent rise in the prices of many consumer goods is raising inflation alarm bells as well.

The US government reported a sharp rebound in retail sales for June on Friday but that was complicated by another report showing a sizable drop in consumer confidence. There are also conflicting signs about the recovery. There are several legitimate reasons for investors to be worried.Įven though the economy and corporate earnings have rebounded sharply from their pandemic era lows of last spring and early summer, worries persist about the Delta variant and the fact that many Americans remain unvaccinated. But the solid gains for the FAANGs of Big Tech have helped lift the broader market in spite of this. The number of companies with stocks hitting new 52-week lows versus highs is increasing, and trading volume for stocks that are falling is also outpacing volume for stocks that are climbing. Investors are also buying more put options, contracts that give them the right to sell stocks and other assets at a specific price.

That’s pushed the benchmark 10-year Treasury yield all the way down to 1.3%, compared to a level above 1.75% as recently as March. Four of the seven indicators are in bearish territory.ĭemand for safe haven bonds is picking up. The CNN Business Fear & Greed Index, which looks at seven different measures of market sentiment, is showing signs of Extreme Fear. But as Friday’s market sell-off showed, investors remain extremely nervous about the market.

The Dow and S&P 500 are both up about 15% in 2021 and are each about a percent away from their all-time highs.

Fear and greed index