U.S. stock investors ‘willing to be patient’ with Omicron, RBC survey shows

Investors identified as “dip buyers” were split between those who were “buying nervously” and those who were “buying confidently”.

U.S. stock investors, U.S. equity, investment, omicron virus strain, Fed monetary tightening, travel-linked stocks
U.S. stock investors are holding off on making their next moves as they continue to assess the impact of the new omicron virus strain.

Bloomberg: U.S. stock investors are holding off on making their next moves as they continue to assess the impact of the new omicron virus strain, according to a survey from RBC Capital Markets.

Roughly half of the 95 respondents said they won’t adjust investment positions until there’s more clarity, with vaccine efficacy and the severity of disease on top of their minds, analysts led by Lori Calvasina, head of the bank’s U.S. equity strategy, wrote in a note Tuesday. Investors identified as “dip buyers” were split between those who were “buying nervously” and those who were “buying confidently”.

“The nervous tape we saw on Monday in which tech, growth, and large cap outperformed will be more representative of the kind of moves we’ll see while investors wait for more clarity than the panic and fear that drove Friday’s price action,” they wrote in the note.

That dovetails with the approach of Brian Barish, chief investment officer at Cambiar Investors LLC, who said he’s picking his spots for investment as he awaits more information.

“Right now we are not making major portfolio adjustments, but there are starting to be some stocks being sold down/blown out that appear pretty interesting,” Barish said in emailed comments. “Some travel-linked stocks shed 8% to 10% on Friday and we made some small adds to these positions, as these kind of moves seem to overstate the potential impact on net business activity on a longer-term basis.”

Regarding the Federal Reserve’s policy outlook, 49% of the respondents said the omicron variant won’t affect the path of tapering, Calvasina and her colleagues wrote in the note. Their views on the trajectory of interest rate hikes are less clear cut, with 22% not expecting any impact while another 22% saying the Fed will delay the start of monetary tightening.

“Importantly, the results suggest to us that U.S. equity investors are willing to be patient as more is learned about omicron in the coming weeks,” according to the note. “The results also suggested to us that a decent number of bulls are lurking in the shadows.”

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