• Bullish sentiment toward major European indices (CAC 40, DAX 40, MIB 40 and IBEX 35) seen in June
• Suggests increased confidence in local industry and central bank policy
• Retail investors continue to opt for out-of-hour trading, accounting for 40.2% of all trades in Q2 2022 compared to 34.2% in Q2 2021.
Spectrum Markets, the pan-European trading venue for securitised derivatives, has published its SERIX sentiment data for European retail investors for June (see below for more information on the methodology), revealing optimistic sentiment from retail investors as the data suggests they favour European stocks with indices turning bullish.
European Central Bank’s rate hikes demonstrated a strong will to battle inflation, while retail investors seem to be discounting the textbook belief that hawkish monetary policies result in economic regression. June’s SERIX data, which describes retail investor sentiment, reveals all major European stock indices, including CAC 40, DAX 40, MIB 40 and IBEX 35, turned bullish last month. SERIX data on all underlying is available on Spectrum’s website.
“The interest rates are still far behind the figures we saw around the turn of the millennium. Yet, most of the economic shocks seem manageable and a couple of economists already expect that interest rates will slow down in the mid-term,” explains Michael Hall, Head of Distribution at Spectrum Markets.
“And despite president Macron losing his absolute majority in the French parliament, which could threaten his economic reform programmes, the French economy still appears healthy. Since the French statistic office INSEE forecasted a rise of GDP of 0.25%, it seems retail investors are increasingly confident in the French economy.”
“Germany, in particular, is suffering from the energy crisis; a complete halt of Russian gas would especially threaten its chemical industry. In spite of this, the SERIX on the DAX 40 indicates a bullish retail investor sentiment for June”, Hall adds.
In June 2022, 115.6 million securitised derivatives were traded on Spectrum, with 39.2% of trades taking place outside of traditional hours (i.e. between 17:30 and 9:00 CET).
87.8% of the traded derivatives were on indices, 3.7% on commodities, 7.3% on currency pairs, 0.8% on equities and 0.4% on cryptocurrencies, with the top three traded underlying markets being DAX 40 (28%), S&P 500 (22.7%) and NASDAQ 100 (12.1%).
Looking at the SERIX data for the top three underlying markets, the DAX 40 became bullish at 102 from 99 last month. S&P 500 increased to 104 from 100, remaining bullish. Meanwhile, the NASDAQ 100 decreased by one point to 100 shifting to neutral.
Calculating SERIX data
The Spectrum European Retail Investor Index (SERIX), uses the exchange’s pan-European trading data to shed light on investor sentiment toward current development in financial markets.
The index is calculated on a monthly basis by analysing retail investor trades placed and subtracting the proportion of bearish trades from the proportion of bullish trades, to give a single figure (rebased at 100) that indicates the strength and direction of sentiment:
SERIX = (% bullish trades – % bearish trades) + 100
Trades where long instruments are bought and trades, where short instruments are sold, are both considered bullish trades, while trades where long instruments are sold and trades where short instruments are bought are considered bearish trades. Trades that are matched by retail clients are disregarded. (For a detailed methodology and examples, please visit this link).
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