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Independent research firm Ned Davis Research is shifting to a bullish view on equities once again after ditching its call at the start of the year, Bloomberg reported Monday.
The firm has reportedly moved to an overweight allocation on global stocks, the first time since January 20, a few days before the market sold off.
According to Bloomberg, Tim Hayes, Ned Davis’ chief investment strategist, put the shift down to various factors, including volatility and investor pessimism reaching extremes in June, with the firm moving 5% to stocks from bonds, taking its allocation to 60% stocks, 35% bonds, and underweighting cash at 5%.
The investment firm is currently neutral on U.S. stocks, but its optimism is gaining following the decline in the first half of the year. Bloomberg said Ned Davis pointed to the MSCI ACWI Index, which holds large and mid-cap stocks in developed and emerging markets, as having “yet to stall out at another lower high, which will make a lower low less likely.”
