Morgan Stanley Wealth Management Pulse Survey Reveals Investor Views Cool Amid Continued Monetary Tightening

Yet many believe that the economy will end up in a good place by the end of the year

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

• Confidence dropped. While over half believe the economy will be in better shape by the close of 2023 (53%), this sentiment dropped 11 percentage points since last quarter.
• Bearish views remain elevated. Nearly half remain bearish at 48%. And the majority (89%) of investors expect volatility to sustain or increase this quarter.
• There’s cautious optimism for a brighter end of year. Despite concerns surrounding inflation and the Fed, investors are cautiously optimistic about the future—50% believe that inflation will reach normal levels by the end of the year, 47% say that the Fed will be able to steer the economy into a ‘soft landing’, and 45% think that the economy is healthy enough for further rate hikes.

“It was a busy first quarter to put it mildly, amid a banking sector rout, sustained geopolitical turmoil, and the sober realization that rate cuts are not coming any time soon,” said Mike Loewengart, Head of Model Portfolio Construction for Morgan Stanley Portfolio Solutions. “The bottom line is that investors need to be prepared for a bumpy road. Inflation challenges will not change overnight and the Fed will continue to do everything in its power to bring it back down to normal levels. Shifts in the market are occurring quickly, so it’s important for investors to sit tight and stay calm during periods of volatility.”

The survey explored investor views on sector opportunities for the second quarter of 2023:

• Energy – Despite geopolitical tensions weighing on this historically volatile sector, investors continue to view energy as their top pick (46%).
• IT – Amid shakeups in the tech industry, investors turned more bullish on the sector with a 7 percentage point jump in interest quarter over quarter to 42%.
• Health care – Amid looming recession fears, the sector remains in the top 3 (38%) as investors look to the historically defensive sector to shore their portfolios.

About the Survey

This wave of the survey was conducted from April 3 to April 20 of 2023 among an online US sample of 924 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 thirds 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.

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Referenced Data

Please rate how much you agree or disagree with the following statements: The U.S. economy will be in better shape than it currently is by the end of this year.
	Q1’23	Q2’23
	Total	Total
Top 2	64%	53%
Strongly agree	26%	19%
Somewhat agree	38%	34%
Neither agree nor disagree	17%	20%
Somewhat disagree	12%	18%
Strongly disagree	7%	9%

When it comes to the current market are you?
	Q1’23	Q2’23
	Total	Total
Bearish	52%	48%
Bullish	48%	52%

Over the next quarter, do you think volatility will...
	Q2’23
	Total
Top 3	89%
Greatly increase	15%
Somewhat increase	40%
Stay the same	34%
Somewhat decrease	11%
Greatly decrease	--

Please rate how much you agree or disagree with the following statements: Inflation will continue to slow, and we will reach normal levels of inflation by the end of the year.
	Q2’23
	Total
Top 2	50%
Strongly agree	17%
Somewhat agree	33%
Neither agree nor disagree	22%
Somewhat disagree	19%
Strongly disagree	9%

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."
	Q2’23
	Total
Top 2	47%
Strongly agree	12%
Somewhat agree	35%
Neither agree nor disagree	30%
Somewhat disagree	15%
Strongly disagree	8%

Please rate how much you agree or disagree with the following statements: The U.S. economy is healthy enough for the Fed to enact additional rate hikes this quarter.
	Q2’23
	Total
Top 2	45%
Strongly agree	15%
Somewhat agree	30%
Neither agree nor disagree	24%
Somewhat disagree	22%
Strongly disagree	9%

What industries do you think offer the most potential this quarter? (Top three)
	Q1’23	Q2’23
	Total	Total
Energy	50%	46%
Information technology	35%	42%
Health care	40%	38%
Utilities	31%	29%
Real estate	27%	29%
Financials	30%	27%
Consumer staples	24%	23%
Industrials	18%	20%
Communication services	18%	19%
Materials	18%	17%
Consumer discretionary	9%	11%

 

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

Source: Morgan Stanley