Morgan Stanley Wealth Management Pulse Survey Reveals Cautious Optimism Despite Short Term Volatility

Rhea-AI Summary

Morgan Stanley Wealth Management's quarterly retail investor pulse survey reveals cautious optimism despite short-term volatility. Key findings include:

• Investor bullishness slightly decreased to 59%, down 2 percentage points from last quarter
• Inflation concerns eased significantly, dropping 8 percentage points
• 64% of investors believe in a 'soft landing' for the economy, up 10 percentage points
• 68% feel the economy is healthy enough for additional rate cuts, up from 48% last quarter

Sector opportunities for Q4 2024 show IT remaining the top sector at 54% interest, followed by energy at 43% and health care at 36%. Chris Larkin, Managing Director at E*TRADE from Morgan Stanley, notes that investors are confident despite some trepidation about the election and geopolitical uncertainty.

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley Wealth Management today announced results from its quarterly retail investor pulse survey:

(Graphic: Morgan Stanley Wealth Management)

• Bullishness pulled back. After a strong September, about 3 in 5 (59%) of investors remain bullish, down 2 percentage points from last quarter with the US election and geopolitical tensions looming.
• Inflation concerns eased. Inflation unease has decreased significantly from Q3—down 8 percentage points, while the 2024 election (34%) and market volatility (23%) maintained their positions as the second and third most concerning issues, respectively.
• Optimism for a “soft landing” increased. After the recent rate cuts, 64% of investors believe the Fed will be able to steer the economy into a “soft landing,” up 10 percentage points from last quarter.
• And investors feel good about the economy. Over 2 out of 3 (68%) feel the economy is healthy enough for additional cuts, up from 48% last quarter.

“It certainly feels like we’re at a bit of an inflection point with the Fed in rate cutting mode and investors remaining bullish,” said Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley. “With year-end in close range, investors are starting to take stock of where the market stands but questioning what’s ahead. Despite some trepidation from the election and geopolitical uncertainty, the momentum from September has investors confident.”

The survey explored investor views on sector opportunities for the fourth quarter of 2024:

• IT – Amid tight supply-demand conditions and AI chip shortages, interest in IT dropped 3 percentage points to 54% but remained the top sector as it has all year.
• Energy – Despite weakness in the sector amid a dip in crude oil, investors remain bullish (43%) on energy.
• Health care – As the 2024 election looms, the defensive health care sector trended upward this quarter with 36% feeling opportunistic.

About the Survey
This wave of the survey was conducted from October 1 to October 14 of 2024 among an online US sample of 990 self-directed investors, investors who fully delegate investment account management to financial professionals, and investors who utilize both. The survey has a margin of error of ±3.20 percent at the 95 percent confidence level. It was fielded and administered by Dynata. The panel is broken into three investable assets: less than $500k, between $500k to $1 million, and over $1 million. The panel is 60% male and 40% female and self-select as having moderate+ investing experience, with an even distribution across geographic regions, and age bands.

About Morgan Stanley Wealth Management
Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

This has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a Financial Advisor.

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Past performance is not a guarantee or indicative of future performance. Historical data shown represents past performance and does not guarantee comparable future results.

This material contains forward-looking statements and there can be no guarantee that they will come to pass.

Diversification and asset allocation do not guarantee a profit or protect against loss in a declining financial market.

This material should not be viewed as investment advice or recommendations with respect to asset allocation or any particular investment.

Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States.

Morgan Stanley Smith Barney LLC and Dynata are not affiliates.
© 2024 Morgan Stanley Smith Barney LLC. Member SIPC.

Referenced Data

When it comes to the current market are you?
	Q3’24	Q4’24
Bullish	61%	59%
Bearish	39%	41%

Which of the following are you most concerned about when it comes to your portfolio? (Top 2)
	Q3’24	Q4’24
Inflation	54%	46%
2024 election	34%	34%
Market volatility	22%	23%
A recession	20%	18%
Geopolitical conflict	12%	16%
Earnings	14%	14%
Energy costs	12%	14%
Fed monetary policy	10%	14%
Jobs market	N/A	4%
Narrow market driven by mega-caps	3%	2%
None	2%	2%

Please rate how much you agree or disagree with the following statements: The Fed will be able to steer the economy into a "soft landing."
	Q3’24	Q4’24
Top 2	54%	64%
Strongly agree	17%	21%
Somewhat agree	37%	43%
Neither agree nor disagree	28%	24%
Somewhat disagree	14%	8%
Strongly disagree	4%	4%
Bottom 2	18%	12%

Please rate how much you agree or disagree with the following statements. The U.S. economy is healthy enough for the Fed to cut rates [again] this quarter.
	Q3’24	Q4’24
Agree (Top 2)	48%	68%
Strongly agree	16%	26%
Somewhat agree	32%	42%
Neither agree nor disagree	26%	17%
Somewhat disagree	18%	11%
Strongly disagree	8%	4%

What industries do you think offer the most potential this quarter? (Top three)
	Q3’24	Q4’24
Information technology	57%	54%
Energy	47%	43%
Health care	34%	36%
Utilities	25%	29%
Financials	28%	28%
Real estate	29%	27%
Industrials	20%	22%
Communication services	19%	19%
Consumer staples	19%	18%
Materials	14%	15%
Consumer discretionary	10%	10%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241017848388/en/

Media Relations Contact: Lynn Cocchiola, Lynn.Cocchiola@morganstanley.com

Source: Morgan Stanley Wealth Management

FAQ

What percentage of investors remain bullish according to Morgan Stanley's Q4 2024 survey?

According to Morgan Stanley's Q4 2024 survey, 59% of investors remain bullish, down 2 percentage points from the previous quarter.

How has investor sentiment changed regarding a 'soft landing' for the economy?

Investor optimism for a 'soft landing' increased, with 64% believing the Fed will achieve this, up 10 percentage points from the previous quarter.

What are the top three sectors investors see as opportunities in Q4 2024 according to MS?

The top three sectors investors see as opportunities in Q4 2024 are IT (54% interest), Energy (43% interest), and Health Care (36% interest).

How has investor concern about inflation changed in Morgan Stanley's latest survey?

Investor concern about inflation has decreased significantly, dropping 8 percentage points from the previous quarter.

What percentage of investors believe the economy is healthy enough for additional rate cuts?

68% of investors feel the economy is healthy enough for additional rate cuts, up from 48% in the previous quarter.