Christopher Brown-Humes at FT.com highlights a Merrill Lynch research piece that shows that investors are increasingly fearful of the US equity markets.
The poll showed increasing investor aversion for US equities, countered by equally strong enthusiasm for Japanese equities, despite the gains of recent months. US equities are less popular than at any time in the past six years, with 63 per cent of respondents underweight the asset class, and only 11 per cent overweight.
âItâs a case of anything but the US,â? said Mr Bowers, âInvestors are even more negative about the US than they were at the height of the Enron/WorldCom debacle in the summer of 2002.â?
He said respondents were concerned about a poor outlook for US corporate profits, a belief that US equities were overvalued and by continued tightening of US monetary policy.
You can see why in the below graph why interest in Japan is on the upswing versus US equities. The ratio of the S&P 500 and MSCI Japan ETFs is pretty clear.

While there is some disagreement over the valuation of the US market, at least sentiment is lining up in favor of contrarians.