Morgan Stanley Wealth Management Pulse Survey Reveals Mixed Sentiment Amid Hot Market and Cool Inflation

Rhea-AI Summary

Morgan Stanley Wealth Management's quarterly investor pulse survey reveals mixed sentiment in Q2 2024. Despite record market highs, investor bullishness remains steady at 61%, up slightly from 60% last quarter. Inflation continues to be the top concern (54%), followed by the 2024 election (34%).

Investors are skeptical about rate cuts, with only 48% believing the economy is healthy enough for the Fed to cut rates this quarter, down from 51% previously. However, 54% expect rate cuts in the second half of 2024. Over half (59%) predict the market will rise by the end of Q3.

Sector opportunities for Q3 2024 include: IT, with continued interest in mega-cap tech and AI; Energy, gaining interest as oil prices trend higher; and Health care, seen as a defensive option amid uncertainty, though interest dipped slightly from the previous quarter.

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

Credit: Morgan Stanley

• Amid record market highs, bullishness remains elevated. 61% of investors are bullish this quarter–in line with last quarter (60%).
• And higher prices continue to be a concern. Inflation remains the top concern for investors (54%), followed by the 2024 election (34%), market volatility (22%), and a recession (20%).
• Investors are skeptical on rate cuts. Less than half (48%) believe the U.S. economy is healthy enough for the Fed to cut rates this quarter, down from 51% last quarter.
• Though the majority believe cuts are on the horizon. 54% believe the Fed will cut rates in the second half of the year.
• And many believe the market will continue to rise before Q4. Over half of investors (59%) predict the market will rise by the end of the third quarter.

“It’s understandable to see bullishness remaining steady this quarter as the market pushed higher driven by mega-caps,” said Chris Larkin, Managing Director, Head of Trading and Investing, E*TRADE from Morgan Stanley. “On the flipside, the narrow market could make some traders jittery especially when compounded by a higher for longer rate stance from the Fed. So, it’s easy to see how investors can have mixed emotions about where we stand when it comes to the market and the economy.”

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

• IT – Tech continues to take the leading spot for investor interest, as mega-cap tech names dominate, with the chips and AI space holding its ground.
• Energy – As oil prices trended higher, positive views of energy stocks mounted this quarter.
• Health care – Amid political and economic uncertainty, investors continue to look at health care—a traditionally defensive sector, although interest dipped from the previous quarter by 2 percentage points as the market moved higher.

About the Survey

This wave of the survey was conducted from July 1 to July 16 of 2024 among an online US sample of 891 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?
	Q2’ 24	Q3’ 24
Bullish	60%	61%
Bearish	40%	39%

Which of the following are you most concerned about when it comes to your portfolio? (Top 2)
	Q3’24
Inflation	54%
2024 election	34%
Market volatility	22%
A recession	20%
Earnings	14%
Geopolitical conflict	12%
Energy costs	12%
Narrow market driven by mega-caps	11%
Fed monetary policy	10%
None	2%

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 this quarter.
	Q2’ 24	Q3’ 24
Agree (Top 2)	51%	48%
Strongly agree	16%	16%
Somewhat agree	35%	32%
Neither agree nor disagree	22%	26%
Somewhat disagree	19%	18%
Strongly disagree	8%	8%

When do you expect the Fed to first cut rates?
	Q3’24
2H ‘24	54%
Q3 ‘24	13%
Q4 ‘24	41%
Not until 2025	30%
I don’t know	11%
I don’t think they will cut rates	5%

Where do you predict the market will end this quarter?
	Q3’24
Rise (Top 4)	59%
Rise 20%	1%
Rise 15%	6%
Rise 10%	15%
Rise 5%	37%
0/stay where it is	20%
Drop – 5%	14%
Drop – 10%	5%
Drop – 15%	2%
Drop – 20%	0%

What industries do you think offer the most potential this quarter? (Top three)
	Q2’24	Q3’24
Information technology	52%	57%
Energy	43%	47%
Health care	36%	34%
Real estate	30%	29%
Financials	27%	28%
Utilities	24%	25%
Industrials	20%	20%
Communication services	20%	19%
Consumer staples	20%	19%
Materials	16%	14%
Consumer discretionary	12%	10%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717163807/en/

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

Source: Morgan Stanley

FAQ

What is the current investor sentiment according to Morgan Stanley's Q2 2024 survey?

Morgan Stanley's Q2 2024 survey shows mixed investor sentiment. Bullishness remains elevated at 61%, slightly up from 60% in the previous quarter, despite record market highs. However, investors continue to be concerned about inflation and are skeptical about immediate rate cuts.

What are the top concerns for investors in Q2 2024 according to the MS survey?

According to the Morgan Stanley (MS) survey, the top concerns for investors in Q2 2024 are: inflation (54%), the 2024 election (34%), market volatility (22%), and a potential recession (20%).

What percentage of investors expect the Fed to cut rates in 2024, according to the MS survey?

The Morgan Stanley (MS) survey indicates that 54% of investors believe the Federal Reserve will cut interest rates in the second half of 2024.

Which sectors do investors see as opportunities for Q3 2024 based on the MS survey?

Based on the Morgan Stanley (MS) survey, investors see opportunities in three main sectors for Q3 2024: IT (particularly mega-cap tech and AI), Energy (due to rising oil prices), and Health care (as a defensive option amid uncertainty).

What percentage of investors predict a market rise by the end of Q3 2024 in the MS survey?

According to the Morgan Stanley (MS) survey, 59% of investors predict that the market will rise by the end of the third quarter of 2024.