E*TRADE study reveals a significant rise in bullish sentiment, yet volatility remains top of mind for investors
April 12, 2019 — NEW YORK–(BUSINESS WIRE)–E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results from the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors. Results show an increase in positive investor sentiment as the market has steadily moved ahead from December 2018 lows.
Bullish sentiment returns. Bullishness rose 12 percentage points since last quarter to once again represent the majority of investors at 58 percent.
Investors believe there’s more room for the bull market to run. Two-thirds of investors say they think the bull market has a year or more to go (66%), up seven percentage points from last quarter.
The majority gave the US economy a passing grade. Investors who gave the economy an “A” or “B” grade rose 9 percentage points this quarter, to 64%.
Volatility concerns remain. Investors who believe volatility will stay the same was up by 8 percentage points from Q1.
“It’s been a great start to the year for the market,” said Mike Loewengart, VP of Investment Strategy at E*TRADE Financial.
“While economic data has shown some slowing, many encouraging data points remain, particularly in the labor market. Investors have shown their resilience and, at least for now, seem to have shrugged off growth concerns from the Fed, as well as auxiliary geopolitical concerns from Brexit, Iran, and Latin America. Hopes of a trade deal with China spring eternal, and any clarity on that front could serve to further drive investor confidence.”
Sector Opportunities
The survey also explored investor views on sector opportunities for the second quarter of 2019:
Health care
Health care remains the top choice among investors (48%) this quarter, as the sector is traditionally viewed as non-cyclical amid global growth concerns.
Energy
Nearly half of investors (48%) see opportunity in the energy sector amid crude’s recent rally and after coming under pressure at the end of 2018.
IT
Despite semiconductor weakness amid ongoing trade disputes, IT holds its place at third this quarter with relatively attractive valuations.
Referenced Data | |||||||||||||
| When it comes to the current market are you? | |||||||||||||
| Total | |||||||||||||
| Q2’19 | Q1’19 | Q1’18 | Q1’17 | ||||||||||
| Bullish | 58% | 46% | 68% | 64% | |||||||||
| Bearish | 42% | 54% | 32% | 36% | |||||||||
| How many years do you think we have left in the bull market? | |||||||||||||
| Total | |||||||||||||
| Q2’19 | Q1’19 | ||||||||||||
| 5+ years | 5% | 5% | |||||||||||
| 3–4 years | 24% | 20% | |||||||||||
| 1–2 years | 37% | 34% | |||||||||||
| The end is near | 23% | 32% | |||||||||||
| I don’t know | 11% | 9% | |||||||||||
What grade would you give the current state of the U.S. economy right now? | |||||||||||||
| Total | |||||||||||||
| Q2’19 | Q1’19 | ||||||||||||
| A | 15% | 14% | |||||||||||
| B | 49% | 41% | |||||||||||
| C | 29% | 32% | |||||||||||
| D | 5% | 10% | |||||||||||
| F | 2% | 3% | |||||||||||
Over the next quarter, do you think volatility will… | |||||||||||||
| Total | |||||||||||||
| Q2’19 | Q1’19 | ||||||||||||
| Greatly increase | 9% | 16% | |||||||||||
| Somewhat increase | 45% | 42% | |||||||||||
| Stay the same | 41% | 33% | |||||||||||
| Somewhat decrease | 5% | 9% | |||||||||||
| Greatly decrease | 0% | 0% | |||||||||||
| What industries do you think offer the most potential this quarter? (Top three) | |||||||||||||
| Q2’19 | Q1’19 | Q4’18 | Q3’18 | Q2’18 | |||||||||
| Health care | 48% | 50% | 44% | 41% | 46% | ||||||||
| Energy | 48% | 40% | 42% | 43% | 41% | ||||||||
| Information technology | 44% | 38% | 49% | 45% | 44% | ||||||||
| Financials | 34% | 36% | 40% | 41% | 40% | ||||||||
| Utilities | 27% | 29% | 23% | 24% | 22% | ||||||||
| Consumer staples | 22% | 30% | 21% | 19% | 24% | ||||||||
| Communication services | 22% | 23% | 21% | 27% | 24% | ||||||||
| Industrials | 22% | 20% | 21% | 22% | 22% | ||||||||
| Materials | 19% | 16% | 17% | 20% | 20% | ||||||||
| Consumer discretionary | 15% | 17% | 22% | 19% | 18% | ||||||||
