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US institutional brokers back in action after Sandy

11th November 2012

LONDON, 11th November, 2012 – TIM Group Update on Institutional Broker Sentiment, following hurricane Sandy.

US institutional brokers immediately snapped back their production of stock trading ideas when the US markets opened for trading after being closed due to Hurricane Sandy.  Idea volume was in the 2000-3000 daily range on Monday and Tuesday, but on Wednesday and Thursday it doubled to the 4000-5000 daily range, which is somewhat above average.

Idea sentiment remained moderately bullish.  To date this quarter, 62% of all ideas have been long.  On Wednesday and Thursday, ideas averaged 64% long.  A long percentage of 66% or more is considered bullish as equity sales desks are recommending two longs for every one short trade.

Since brokers have generally been in this 60%-plus range since the beginning of October, it would appear the outcome of the US presidential race, or the US and European fiscal and economic situations, don’t pose any immediate threat to their outlook.  During the last election, long ideas averaged a moderately bearish 59% in October 2008, slightly more bearish than during the month of September 2008, when the stock market was hit by the failure of Lehman Brothers.