Sentiment can't get much worse (contrarian signal), 🧁 plus weekend sprinkles 🧁
The Sandbox Daily (4.17.2025)
Welcome, Sandbox friends.
Quick publisher’s note before we begin today: The Sandbox Daily is heading to Florida for spring break and will return to your inbox on Thursday, April 24th with our regularly scheduled programming.
Today’s Daily discusses:
sentiment can’t get much worse
🧁 weekend sprinkles 🧁
Let’s dig in.
Blake
Markets in review
EQUITIES: Russell 2000 +0.92% | S&P 500 +0.13% | Nasdaq 100 +0.01% | Dow -1.33%
FIXED INCOME: Barclays Agg Bond -0.25% | High Yield +0.58% | 2yr UST 3.801% | 10yr UST 4.334%
COMMODITIES: Brent Crude +2.63% to $67.58/barrel. Gold -0.32% to $3,335.8/oz.
BITCOIN: +0.63% to $85,006
US DOLLAR INDEX: -0.04% to 99.373
CBOE TOTAL PUT/CALL RATIO: 0.95
VIX: -9.16% to 29.65
Quote of the day
“Be tolerant with others and strict with yourself.”
- Marcus Aurelius
Sentiment is historically poor
They say there are decades where nothing happens and weeks where decades happen. This sentiment sure rings true these past few weeks.
With one negative headline after another, it’s impossible to escape the tariff overtures and recession noise.
This week, we learned the American Association of Individual Investors (AAII) Sentiment Survey showed that Bearish Sentiment registered above 50% for the 8th straight week. Eight consecutive weeks is now a record dating back to the survey's inception in 1987.
This has never happened before.
Not during the different wars over the last three decades, the dot-com bust or Global Financial Crisis, the Covid-19 once-in-a-lifetime pandemic, nor 9/11.
The 2025 trade wars now stand alone.
Last week, the Reuters/University of Michigan Consumer Sentiment Index told the same story.
The recent survey results took this sentiment index to its lowest level since June 2022 and the second-lowest on record since the survey began in 1952. Sentiment has plunged over 30% since December as growing concerns about trade war developments risk tipping the economy toward recession.
Its steep decline from a year ago implies a downside risk to consumer spending and overall economic growth in the near-term.
Over on the hill, same story.
The Economist shows President Trump’s approval rating has fallen precipitously, especially after his ruinous tariff announcement two weeks ago caused visceral panic across global financial markets.
Investors triangulate indicators like sentiment alongside other measures to look for asymmetric opportunities. Over the last week, we’ve witnessed elevated put-call ratios, VIX spikes, breadth and volume capitulation, and momentum washouts, among others.
Taken together, these various technical factors are the most supportive for the market in years and represent a contrarian buy signal. This technical inflection shows the market has room to run higher after its bounce off the cycle lows last week.
Of course, personal considerations like time horizon and risk tolerance must be considered, but for long-term investors, the current setup is looking more and more attractive.
Sources: Bespoke Investment Group, Ned Davis Research, The Economist
🧁 Weekend sprinkles 🧁
Here are the ideas, sights, and sounds that caught my attention this week – perfect for quiet time over the weekend.
Blogs
The Irrelevant Investor – How Does the Stock Market Bottom (Michael Batnick)
All Star Charts – NYSE % Stocks > 200 Day Moving Average (JC Parets)
Oblivious Investor – What to Do During a Stock Market Downturn (Mike Piper)
Oaktree – Nobody Knows (Yet Again) (Howard Marks)
Baird Private Wealth – Bull & Baird: When Uncertainty Reigns (Michael Antonelli)
New York Times – How to Ease Your Money Anxiety When the Economy is Stressing You Out (Diane Harris)
Podcasts
Daily Stoic – Live Authentically with Matthew McConaughey (YouTube, Spotify, Apple Podcasts)
Movies/TV Shows
Jerry Seinfeld – 23 Hours to Kill (Netflix, IMDB, YouTube)
Music
One Republic – I Lived (YouTube, Spotify, Apple Music)
Books
Vishal Khandelwal – Boundless (Safal Niveshak)
Fun
Guy In Finance – The Penguins Have Landed to Discuss Retaliatory Tariffs (Instagram)
That’s all for today.
Blake
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Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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