AAII's Rotblut on why it's hard to have 'neutral' feelings about this market

Charles Rotblut, vice president of the American Association of Individual Investors and the keeper of the group's long-running Sentiment Survey, discusses how pessimism among individual investors about the short-term outlook for the stock market increased last week, even before the stock market took a nosedive on Thursday, two days after the midterm elections. Rotblut says that sentiment numbers show that people are unusually at both ends of the spectrum — either highly bullish or bearish — with little action in the middle because the sentiment over the market is polarized between those expecting trouble and investors who expect artificial intelligence to keep carrying the day. Times with little neutral sentiment, Rotblut says, tend to be rare, and tend to be when markets have heightened volatility.

David Trainer, founder and president at New Constructs, put Anthropic in "The Danger Zone" pre-IPO about a month ago, based on the limited amount of information the company had published in regulatory documents before going public. Now, in the fastest turnaround in Danger Zone history, Anthropic is back in the Danger Zone, after Trainer says that subsequent documents showed that the deal is definitely a cash-out, a way for insiders to get liquidity before "a money-losing business model" gets a lot worse. Trainer noted that Anthropic's off-balance sheet debt rose by 88% to nearly $900 billion, while revenue growth slowed and costs picked up. With debt holders being paid first, Trainer says the IPO is practically doomed from the start, as the new shareholders effectively will pay off existing debts before they can ever make a penny.

In "The Week That Is," Vijay Marolia, chief investment officer at Regal Point Capital, talks about election fallout, heightened volatility and fear, and whether the market has already moved on, buoyed by a strong jobs report. He says long-term investors "might be seeing a clearance sale" with the market's post-election volatility, and he is hoping for the market to "bounce up" from here.