While the economy continues to produce positive headlines, bullish sentiment among investors retreated slightly from Q1 peaks.
NEW YORK, April 17, 2017 /BusinessWire/ — E*TRADE Financial Corporation (NASDAQ: ETFC) today announced results from the most recent wave of StreetWise, E*TRADE’s quarterly tracking study of experienced investors.
Results indicate that positive investor sentiment has leveled off from the previous quarter:
- Bullish sentiment is at 63 percent, decreasing two percentage points from Q1’17 highs.
- Slightly more than half of investors believe the market will rise five percent or more this quarter, down five percentage points from Q1’17.
- Investors remain most likely to choose “Easy Rider” as the movie title that best describes their views of the market.
- More than three out of five investors continue to believe the U.S. economy is healthy enough for additional rate hikes this quarter, down one percentage point from the previous quarter.
“In this sustained bull market, a pullback or correction is never out of the question,” commented Mike Loewengart, VP of Investment Strategy at E*TRADE Financial. “With the Fed planning to reduce their balance sheet, while suggesting more hikes may be on the way, coupled with the legislative uncertainty around several policy reforms, investors may be lowering their expectations, if only to reflect if the market is peaking or gearing up for another run.”
The survey also explored where investors feel potential investment opportunities may be this quarter. Mr. Loewengart offered insight into those identified:
- International equities. Talk of the Trump Trade (i.e., bullish trades in sectors that stand to benefit from President Trump’s proposed policies) has dominated U.S. markets, but investors appear to be turning their gaze to international equities. While investors still favor domestic markets, interest in both developed international and emerging markets rose this quarter amid attractive valuations and uncertainty in the U.S.
- Information technology. Investor interest in information technology surged 12 percentage points from the previous quarter, and is now the sector that investors believe offers the most potential this quarter. While IT performance struggled in the aftermath of the election, market observers are pointing to strong fundamentals and robust consumer demand.
- Energy. While the energy sector started the year as one of the worst performing sectors, its recent resurgence has investors taking note, amid a tightening of international supplies and profit growth expectations ahead of earnings. Although interest in the sector declined from Q1, surveyed investors still believe it offers potential this quarter.
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About the Survey
This wave of the survey was conducted from April 1 to April 10 of 2017 among an online U.S. sample of 958 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.18 percent at the 95 percent confidence level. It was fielded and administered by Research Now. The panel is broken into thirds of active (trade more than once a week), swing (trade less than once a week but more than once a month), and passive (trade less than once a month). The panel is 60 percent male and 40 percent female with an even distribution across online brokerages, geographic regions, and age bands.